The Business Advisory Role in the Small Business Management - Case Study Example

Business Advisory Firm (Student’s name) (Institution’s Name) Contents INTRODUCTION 3 The Business industry 4 Target Market 6 Competition in this industry 10 Proposed plan 12 Market, technical and product feasibility 13 Conclusion 13 ABSTRACT The role of offering advisory functions to business entities have become one of the most practiced and common activities in the corporate world. The demand for these functions has also increased. This study focused on developing a new advisory firm which offers an array of business advisory role to medium and small scale business. It focused on developing of a report seeking to established the feasibility of coming up with such and advisory firm. INTRODUCTION The business world stands out as one of the fastest growing and evolving in the modern world. There is significant rise in the number of small, medium and large corporations in practices, increase in the types of business activities and also a high demand for business-related support. This has necessitated the rise of several advisory firms which tend to capitalize on the existing opportunity in the market. The expansion of the business activities, as well as the rise in the information demand, has prompted the need for business support services across the business world. Some of the specific activities highly sought after include the accounting and financial services, taxation services, human resource planning services, logistics and purchase services among many others (Brock & Hinings, 1999). Both large and small business entities require such services, and this has been on the highly demanded areas in business. This paper intends to discuss the requirements such as technical feasibilities, market research and service opportunities for the case of a newly formed advisory firm. The decision to come up with this venture stemmed from the experience and knowledge acquired while working with Smith and Associates which offers advisory services on business-related concerns. The paper intends to discuss the industry factors, market opportunities, competitor activities among other areas of need before coming up with such a firm. The Business industry The proposed business intends to operate under the name of “Best Advisory Firm.” The specific focus or purpose of coming up with this venture is to capitalize on the opportunities existing in small and medium size business in regards to business advisory activities. Besides the large entities, the smaller and medium size business have grown the need of being exposed to business support services so as to enhance the efficiency of their activities. Concerns have been channeled towards how the small and medium business handles their activities and how they tend to manage most of the industries. Some have actually failed. Therefore, this venture seeks to promote the advisory role in small and medium business with a view of exploiting the existing opportunities in this market. This industry is highly competitive due to the entry of several advisory firms seeking to share the business opportunities. Both large and small advisory firms have indicated their interest in this industry, and this has further made it highly competitive. The present activities in this industry are motivated by the high need of advisory information in the market. This is however expected to grow in the future as many small and medium size businesses seeking to extend their demand within this industry. As a matter of fact, the current composition of players within this market is expected to grow by 12% in the next 5 years depending on the projections made in this industry (Cumming & Fischer, 2012). Most of the participants within this industry are driven by plethora of forces or reasons which tend to act as opportunities for venturing in the business. One of the most common driving forces is the high literacy skill within the population as the demand for better and efficient services continue to be on the rise. The modern population is highly aware of their preferences and tastes. This has made most businesses seek for the intervention of advisory firms to help them come up with the better services and activities to meet the increased literacy skills. Besides, there has been an increase in the household income and economic progression as indicated by the economic surveyors. Most of the people are able to afford basic services related to improving their businesses. For example, most proprietors of small and medium size business have a great desire to seek the activities of advisory firms since they are able to afford and pay for such services. The ordinary business men have therefore been able to have an improved economic perception of the need for the advisory roles from the advisory forms, and this has acted as a motivating factor for most investor’s sin this industry. There has also been the need for firms to improve their efficiency for purposes of surviving the intense forces of competing. Most of the small and medium firms operating in the market have therefore opted for the roles of the business advisory forms to enable them to improve their activities. For example, most of the investors in this industry have been compelled by the greater demand stemming from the intense competing in the market. In fact, there s usually a ready market in small and medium size business in regards to the need for business advisory roles. This has been of great significance to most of the investors in the industry. The ease of receiving and accessing information from the internet sources has also been a driving force within this industry. For example, most of the ventures in this industry have been fired or solicited to offer services on technology and related issues in the market. This has been coupled by the need for better internet information and ease of access to such information. Besides, the ease with which the people in this market can get the internet information has propelled most of the business to seek for the advisory functions to enable them to gain a positive image in the market. The clients and prospective customers usually have much interest in the available information pertaining to a particular business before subscribing for their activities. This has therefore increased the need for the advisory information for the business advisory forms so as to become relevant and give the best positive image to the users of the internet platforms (Yusoff et al., 2010). Target Market The “Best Advisory Firm” is proposed business which targets the small and medium firms within the market. The current market within which this firm intends to operate entails both large and small business entities. The large corporation requires the business advisory activities. The situation is also the same for the small and medium size business. Therefore, this venture focuses on the small and medium business which is operating within this market. The small and medium size business in this market engages in different business activities. For example, there are those which deal in selling the household items; others deal in selling electronics while others are interested in real estate business. The “Best Advisory Firm” intends to target all thee business despite their particular business interest. Therefore, the target market may possess homogeneous qualities or not, but the need for advisory function is usually uniform in all these circumstances. The nature of the advisory role intends to be homogenous and be applicable to the entire market in a uniform manner. Therefore, there is no particular segment with any unique features targeted by this advisory firm. The small and medium business within this market have a great demand for the business support services since most of them engage in a wide range of business activities. There are differentiated roles and functions for this small and medium business within this market. Despite such differences, the advisory role required is relatively uniform and similar in all the circumstances. There has been a tramendous increase in the need for business support services across the market even in the case of the large corporations. Studies reveal that the uniform evolution and changes within the corporate world has had a uniform influence in this business despite their sizes. The market has therefore been having a uniform desire and need of the advisory functions. This has, therefore, made the proposed business to settle majorly in the small and medium size business as the focus ares for the services. The demand expressed by operators in the market especially for the small and medium size business has risen in the recent years. Studies also approximate that such demands may rise in the future and this has been a reason for the firm to seek to invest specifically in this ares of the entire market (Dawes et al., 1992). There has been a positive trend in the rise of demand for the advisory roles in the market. Studies indicate that the growth potential in this market ranges between 12%-14% on an annual basis. This business intends to capitalize on this projection so as to benefit from the returns expected in the market. The other projection also indicates a positive rise in the growth of the number of services needed by the business. The dynamics in the business world have led to a lot of new inventions and also the introduction of new ideas within this market. This has necessitated the need to increase the services meant for the advisory activities. In recent years, the administrative services have a grown. Studies indicate that these services are expected to grow by 4% in the next five years meaning that the advisory firms will be having a number of services to offer to the general public (Kilcrease, 2011). The proposed business intends to capitalize extensively on this projection and seeks to develop high potentials from the market growth. The following indicate the projected demand for the various services to be offered by this business on an hourly basis; Services Hourly projection Basic word processing $7-40 Enhanced word processing $7-50 Copyediting $7-75 Database entry $18-50 Transcription, general $15-45 Consulting/training $7-90 Spreadsheet design $15-75 Desktop publishing $7-75 Graphic design $14-100 Web site design $20-150 Internet research $7-75 The projections are excited to be achieved within the normal working environment which is existing as per now. However, there are a number of potential factors which would affect the realization of projection within the market. The changes in the demand patterns have been quite significant in determining the returns achieved within the market. A high trend of demand implies growth in the market and high possibility of achieving the projected returns. Alternatively, lower demand patterns imply a reduction in the potentials existing in the market. It’s provisionary that the demand patterned may change over time. However, researchers argue that any change in the demand patterns would be to the rise and this implies that business will be positively affected by the changes in the market. The political factors and government policies have great bearing in determining the operations of these firms in the market. Appositive policy environment would be helpful in increasing the activities of the firm. On the other hand, a negative policy environment from the regulatory authority in the country would highly affect the activities happening within this environment. Therefore, it’s likely that the government policies and the regulatory framework would change over time. Similarly, researchers argue that such changes would tend to favor the development of activities of the advisory firm and make it realize its projections over time (Cumming et al., 2015). Generally, the market share for this proposed business is expected to grow in the coming years. The annual projection of growth indicates that the business would have the following patterns of growth for the next three years; Years Year 1 Year 2 Year 3 Proposed market share 6% 8.5% 10% These patterns of growth trends are expected to be witnessed in the next three years of operations. Further, the projections have a pattern of higher growth after the three years due to the expected positive demand for the services of this firm in the marker. In addition, the possible rise of activities within these years is expected to stem from the positive returns out of investing in this venture. The projections feature the business to be expending better returns and growth potentials within the market of small and medium size business. Competition in this industry Since the demand for the advisory role among the business cropped up, there has been a high interest in this industry with various investors seeking to capitalize on the growing opportunities. There has been a considerate entry of new players with some seeking to venture in the small, medium or even the large corporate entities in this market. The business advisory role has also been on the rise due to the changes that have occurred in the market and rise in the demand for these activities. There are many competitors in this market who are also seeking to outdo one another through coming up with unique services in the market. Some of the common competitors in this market include Name Rating A.T. Kearney High Abeam High Altran Medium Avasant Low Logica High Mercer Low Towers Watson Medium WS Atkins PLC Low The named competitors have been providing a great and intense competitive force in the market. The industry is faced by a number of new entrants who seek to benefit from the increase in the opportunities within this market. Some provide high commotion while others provide a low rating of completion in the market. On the other hand, others offer medium range competitors in this market. The advisory firm intends to deal with those competitors who offer high competition so as to be able to have an operational niche in this market. There is little focus on those which offer low completion in this market. These competitors offering high completion are those which have had a significant market share under their control and currently command a larger customer base. The firms with low completion rating have relatively little market share under their control and therefore the proposed firm has a high potential of taking advantage of these loophole or lowly competitive areas in this market. The proposed firm intense to improve on the quality of its service by offering top most and highly efficient advisory role in the market. The customers are highly sensitive on the efficacy of the services offered and how such are relevant in enabling the business improve their activities. Therefore, the quality and efficiency of the advisory services to be offered to the market is one of the ways through which the firm intends to capitalize on the opportunities and also beat the high completion. Te price strategy is also another way intended by the proposed firm as the competitive tool in the market. There is an average fee charged for the services of different kinds offered in this industry. The proposed firm intends to come up with a penetration price strategy. This strategy is usually intended to enable a new venture to penetrate into the market. It involves charging relatively lower than the average cost in the market so as to attract the potential customers into the business. The firm intends to subsidize all its activities as a way of gaining new sections of this market and also appealing to new customers in the market (Rose et al., 1999). Proposed plan Location: the preferred location for this business is within the capital city of the country. There are a lot of businesses which are centered in this section of the country. Most of the investors engaging in commercial activities have their outlets within the city and are therefore in search of advisory firms within their disposal. Premise: the business intends to rely on a rented premise. The proposed rented premise needs to cost about $100 on a monthly basis. This is affordable specially for a start-up firm of this nature which needs to minimize its costs and increase its potentials he premise is to be acquired as soon as the firm is ready to commence its activities within this areas and is to be under the rental agreement in the entire period within which this firm remains in this location. The variations which occur in different seasons have a great bearing in the activities of this advisory firm. There are those with high potentials of causing negative effect in the prosperity of this firm. Therefore, a provisionary account is to be set aside to help deal with any negative eventuality which occurs in the lifetime of the business (Panel & Roach, 1999). Market, technical and product feasibility The proposed business is highly feasible in its choice of the kind of services to offer to the market. The selection of the medium and low businesses is quite ideal due to the much concentration of most advisory firms on the larger entities. Besides, the technical aspects of starting up these firms are highly affordable and are within the range of a small start-up such as this. Therefore, the firm would potentially grow from this projection and increase its market share over time. Conclusion The business advisory role has become on of the highly desired activities in the corporate world. Many people have opted to venture in this area due to its high and potential returns. This study focused on the report for establishment of a new advisory form known as “Best Advisory Firm”. It considered some of the industry and business factors which affect the venture and how such can be managed to realize the potentials of the firm. References Brock, D., & Hinings, C. R. (1999). Restructuring the professional organization: Accounting, health care and law. Psychology Press. Cumming, D. J., & Fischer, E. (2012). Publicly funded business advisory services and entrepreneurial outcomes. Research Policy, 41(2), 467-481. Cumming, D., Fischer, E., & Peridis, T. (2015). Publicly funded business advisory services and entrepreneurial internationalization. International Small Business Journal, 33(8), 824-839. Dawes, P. L., Dowling, G. R., & Patterson, P. G. (1992). Factors affecting the structure of buying centers for the purchase of professional business advisory services. International Journal of Research in Marketing, 9(3), 269-279. Kilcrease, K. M. (2011). Faculty perceptions of business advisory boards: The challenge for effective communication. Journal of Education for Business, 86(2), 78-83. Panel, B. A., & Roach, N. J. (1999). Business Entry in a Global Economy: Maximising the Benefits. Department of Immigration and Multicultural Affairs. Rose, T., Hinings, C. R., Brock, D., Powell, M., & Hinings, C. R. (1999). Global clients’ demands driving change in global business advisory firms. Restructuring the professional organization: Accounting, health care and law, 41-67. Yusoff, M. N. H. B., Yaacob, M. R. B., & Ibrahim, M. D. B. (2010). Business advisory: A study on selected micro-sized SMEs in Kelantan, Malaysia. International Journal of Marketing Studies, 2(2), 245. Read More