Small Business Start-up and Management Assessment - Essay Example

Small Business Start-up and Management Name Course Tutor Institution Date Executive Summary Jacksofalltrade.com focuses on selling product online. The site wil connect a great number of customers to the buyers. The site will be available on a 24/7 basis and it will facilitate easy selling and buying of products. The company has been described in term of the objectives and its missions. The market analysis offers a clear description of the market and the best way in which the startup can make use of it to their benefit. The financial plan also offered the capital estimations and the profit estimations. The section further deals with the fund distribution, sourcing and the growth and exit strategies. Thus, it evident that jacksofalltrade.com will in a way replace the traditional trading methods with adequate and affordable product’s and offer great shopping experience to the buyers. 1. General Company Description Jack of trade online store is a business that we aim starting up and the store will at offering people with a wide range of products. The store will offer a good collection of high quality products and this will be done in competitively low prices. The company will aim at making use of a competitive pricing strategy, this will also entail the use of advanced marketing strategies, and the customers will be offered with excellent services (Frederick & Jeffrey 2004). Through this, we totally believe that the business will be among the most success online stores any time soon. The stores will aim at being the most preferred store and this will be achieved by inspiring a great number of people to purchase and make use of the products from the website so as to improve their lifestyles. Thus, the core aim of the store will be to become a majors suppliers and an intermediary between the buyers and sellers through the use of online means. This will make the experience enjoyable and offer high level of convince since the sellers will not spend much of their time looking for buyers, the buyers will also get a wide range of products to choose from, and thus they are likely to end up purchasing the products that meet their needs in the most effective manner. The mission’s statements of the company will be offering high quality products at very affordable prices and there will be delivery of products to customers who are located in faraway places. Based on these they plan to tap the unattended needs of people who may find the traditional methods convenient. Thus, the company will offer convenience to the consumers and offer value for the money they have paid for and thus will be backed up by satisfaction and quality. The company will also aim at achieving the objectives outlined below To flawlessly offer products at the most affordable prices To build a stable and effective network between the buyers and the sellers To offer customers with a quick service and best value for the money they pay When the above objectives are achieved, the company will be making great sales and they will succeed in the near future. The store will also offer those in nearby places the opportunity to visit the store to see the item, if they like and agree the price the item is sold, where company keeps some profits in form of commission and remaining amount is credited to seller’s account in certain time. 2. Products Like any other company, products are very essential to them. This is based on the fact that a great number of companies are operating in the chosen area and thus there needs to be some differentiating factors to ensure that the site is the most preferred purchasing destinations for a great number of people. In this regard, the online store will sell almost everything ranging from electronics, accessories and clothes just to mention a few of them. By focusing on a wide range of products the sites is likely to succeed since they will be receiving huge commissions from the various products they sell and they will be earning from the storage charges that will be imposed on the products. Goods will be kept in the store free of charge for one week, if item is not sold within one week then after that there can be small amount of rental based on the size and capacity of the item kept in the store for sale. Seller can get their item back without selling but they have to pay small amount of money for keeping charges. The use of the website will ensure a greater market reach to the sellers and also offer convenience to the customers. The online store will offer a platform from which customers can choose from and it will also allow the sellers to enlists their various products and prices and this will ramp up sales and also assist them greatly in increasing their reach. The core model of business in this case can be divided into two major categories that is based on the interaction type and based in the customer segments. The business to customer’s model will be used to offer quality, convenience as well as value for money to the consumers. There will also be business to business since there are those businesses that may be greatly attracted by the products in the stores. There will be bulk shipment and delivery and the customers will be charged for the shipments. The revenue model that will be applied in the website will be categorized on registration, listing fee and advertisement and service charges. In regard to registration, the sellers will be charged a fee for them to register in the website. When it comes to the listing fee, the sellers will be required to pay for enlisting their products. This fee will be a variable rent that will be calculated by keeping in mind the costs as well other factors in place. The services charges, which will be charged, are related discounts, maintenance and shipments. The website will also allow different kind of advertisements and this will be a great source of revenue for the company. This is based on the notion that a great number of companies are making use of the internet to make advisements with the aim of reaching a greater number of customers from all over the globe. 3. Marketing Plan Like any other company, Jackofalltrade.com will need to have a marketing strategy. Jackofalltrade.com will target a niche category of consumers who have certain needs and this will mean that they will attempt to meet the needs of the market, which had remained unattended for a long period t time and more so in relation to offering, the customers with high level of convenience (Rhonda 2000). Thus, there needs to be great level of awareness across the customers and this will assist greatly in converting the consumer’s needs into demands. The marketing strategy will be formulated with the aim of sustaining the business. In this respect and for the business to benefit greatly the marketing strategy needs to be aligned with the above stated mission and objectives. 3.1 Target market and segmentation After some research the customers for the business will entail People who are 25years and above Households which have children Customers to have diplomas since they are mostly likely to have some knowledge of online shopping and adequate use of the internet Customers who required high-level of convenience and Customers who have credit cards to make use of them in their purchases. We will further justify the company segmentation strategy (Rhonda 2000). Therefore, we aim at defining our market segmentation with the aim of gaining a meaningful approach to customers. We have ascertained that the customers within the targeted segments are likely to behave differently from each other. Thus, the various segments have been formulated with the aim of offering motivation to the consumers in terms of quality, timeliness and price. Thus, through the segmentation the consumers will have a lot ease in shopping in terms of time and price. The marketing team in the organization will engage in web-based marketing and this will be done so as to create great level of awareness of the company, its services and products offered. Over a period of time there have been a decline in advertising, the prices related to advertising will reduce significantly, and this will make this form of advertising more cost effective as compared to other methods. This will translate into great savings from the side of the company. The ads will appear in the mobile applications and in other major websites. This will ensure that the website gains a lot of acceptance from a great number of people from all over the globe. In addition to these, we will also make use of outdoor ascertain g and this will offer general awareness to individual and to the general public. 3.2 Sales strategy To offer great level of convenience and security jacksofallytrdae.com will make use of electronic payments methods and this will be facilitated by the secure internet connection. Thus, all the orders made to the website will be agreed from the MasterCard’s and visa cards. Additionally, to ensure that the customers who visit the website make purchases the website will be easy to navigate and the customers will also be offered with an opportunity to search for available items based on the item type, location as well as price range. This will make it very easy for the buyers to locate the items they want to buy and compare between various companies offering the products. the website will also offered entailed information on the features of certain products and thus customers will review and make accurate decisions based on their needs (Rhonda 2000). 3.3 Trends in target The startup has a high growth potential and we will make use of opportunities to enhance put business. Irrespective of the fact that there exist a great number of competitors in the industry and there is existence of technology, which is not effective in the market, we will differentiate ourselves in the eyes of the consumers (Frederick & Jeffrey 2004). Thus, as a team we will really focus on delivering the unmet needs and promises that are not being met by the competitors. This will be done by analyzing what the competitors are doing wrong and thus focusing on those areas so as to gain a competitive advantage in the market and in the industry. 3.4 Entry barriers Venturing into a new market is usually not an easy task and in most instances, there are wide ranges of barriers starting a new company. Since the chosen stratum is very technical, there will be high capital costs and this may be a great barrier since with the lack of enough funds the startup may fail terribly. Additionally, since the startup up is not well known there will be need for aggressive marketing of the websites in various channels. This will entail in advertisements in other websites, television and radio adverts and in other print media such as the industry magazines and newspapers. This will be done to ensure that there is great level of awareness of the website, their services as well as the products that the consumers can get from the website. There will also e barriers related to training and skills. This will be so since the operation of these websites calls for people with adequate knowledge. Thus, employees who will work in the startup will need to be trained on how to deal with the customers in an effective manner and how to handle customers from diverse places and leave them satisfied with the services and product offered to them. This will create return business for the company as the satisfied customers will recommend the website and their products to their friends and close family members and this will mean greater sales for the business in the near future. There will also be others barriers that can be attributed to the shipping time and cost. For customers who are far away from the stores the deliveries may take a long period of time and at time the customers may feel dissatisfied with the product and request a change. This will be great barrier since it may be discouraging for consumers who need the product urgently and this may cause inconvenience. When these barriers are not addressed on time, they are likely to cripple the business. Thus, the management team will need to handle the barriers on time and through the use of effective mechanisms. This will ensure that the startup is of great success and there will be achievement of the mission and the objectives in a timely manner and through the use of the least amount of resources. 3.5 Changes that may affect the startup The startup is likely to be affected by a number of factors such as technology, government regulations, change in the online marketing industry and changes in the economy. The startup will mainly make use of technology to enhance their operation thus nay changes in technology will affect the startup greatly. Failure of systems will affect the business in a negative manner since it will cripple the business for some time, this can translate to greater losses for the business, and the customers may fell unsatisfied with the services offered by the website. Advancements in technology can be of great benefit to the startup since it will lead to improved level of services and the customers will feel secured when conducting business online. Additionally changes in government regulation can also affect the business startup in anumberof ways. When the government imposes stiff regulations, they are likely to limit the sales made by the site. For instance, in instance when the government implements high taxes they are likely to have an impact in that the number of people making purchases form the site are likely to reduce. The customers are likely to look for other alternative from other online stores where the amount may be lower than those being offered by the startup. People are said to spend more when the economy is performing well and in instance when the economy is, performing poorly the purchasing power of the buyers is reduced by substantial levels. Additionally, some changes in the industry are likely to augment the sales made while some changes may also reduce the sales. Thus, the team tasked with managing the startup will need to ensure that they put measures in place so as to ensure that the changes occurring do not affect them negatively and if so they should put adequate measures in place so as to be affected at minimal levels. 3.6 Products The major products will include electronics, cars, accessories and clothes just to mention a few of them. This product will be of high quality and they will be offered at different prices, quantities and colors. These will offer the customers with the opportunity to choose the products that meet their immediate needs in the most effective manner. The startup will also a number of after sales services for example free delivery to those near the stores, warranty, a refund policy and support services. 3.7 Competition Competition is usually common in all industries and the main competitors of alibaba.com and amazon. Some of the competitors will compete with the startup across the board whole some of them will just compete in regard to just some few products. There will also be the indirect competitors and more so malls that have a wide range of products like the ones that will be available in the online store (Frederick & Jeffrey 2004) 4. Operational Plan 4.1 Operational approaches The operations of the startup will be carried out through two major approaches. The first one will be the business to business and this will be focused more on the creation of a one on one customer relationship. The customers in this case are the retailers and the wholesalers. The other category is the business to consumers. In this regard the consumers seems not to be interest on how order will be fulfilled and thus we well design our supply chain. Thus the core aim will be keeping track on the statistical analysis of the company’s customer base with the aim of understanding what is going on at any given time. 4.2 Milestones Jack of all trades will needs to have a number of milestones before hand and this will entail Completion of the business plan and this will act as an indispensable tool that is needed for ongoing performance improvement in the organization. Completion of the website Hiring personnel to work in the startup. 4.3 Business model Despite having B2B business the startup will mainly entail a B2C model and therefore great attention will be given to retailing in the website. In instances when the process is made too compels and inconvenient for the customers this can be step in the wrong direction since people will not be motivated to make use of it. Additionally, inventories made every time will be recorded and this will assist greatly on knowing the inventories that should e kept on hand. Additionally, the startup will also make use of some online survey and this will be aimed at relating to the customers consumption preferences. 4.4 Inventory management Inventory management is very essential when it comes to attaining costs effectiveness. It involves the control and direction of the activities with the main goal of getting the right inventory, in the right time at the right place and the required quantity, in the right forms and at an affordable and right cost. Thus, there will be optimization of the supply by ensuring the inventory is very low by making use of a number of techniques such as the cost of placing orders and fluctuation inventory. The fluctuation inventory will be used with the aim of prevent any disruption in the delivery of required products to the customers. Thus, we will maintain some buffer stock on the mostly requested products and this will go a long way in protecting fluctuations in demand and supply. It will also help in solving stock out situations that may arise from time to time. There will also be application of the lot size inventory and thus products will be purchased in greater quantities than what is relay required and through this the organization will take advantage of the discounts and thus there will be reduction on shipping costs as well as setup costs. There are other instances where cross docking will be applied and this involves a strategy of moving the goods directly from the warehouses to the consumers (Rhonda 2000). 5. Management and Organization The startup will need to be managed effectively for it to succeed and be sustainable in the near future. Therefore the startup will be managed by a group of managers who have wide knowledge in online stores. This will act as benefit to startup since they will bring along a lot of experience and knowledge. Even in instances that the managers are incapacitated there are plans underway to ensure that the business continues to operate. Below is an organizational chart which shows the management hierarchy in the organization In addition to the above employees the startup will also attain both professional and advisory support from the management advisory board, the board of directors, an insurance agent, bankers, attorney, accountant and consultants. 6. Startup Expenses and Capitalization Based on research the startup is estimated to costs a 1 million dollars but to cater for the unexpected situations that may arise 200, 000 dollars will be kept aside to cater for such expenses. I will talk to other people who have started up a similar business and this will assist greatly in getting a good idea on how much money should be allocated to the contingencies. In instances when I fail to get good and adequate information, I will make use of the rule of thumb that the contingencies should always to at about 20% of the total costs of a startup. The total amount of the funds that are required will be sourced from banks loans. Investors will also be offered with an opportunity to contribute and the percentage of ownership will be based on the amount of money. 7. Financial Plan Jacksofalltrade.com aims at being a great online store and we will have a number of warehouses to ensure that we offer efficient services to the customers. 8.1 capital estimation 8.1.1 Fixed Asset The initial setup of the startup will be based on renting the space as opposed to purchasing it or building one. This will offer the needed flexibility. The official site will be Business Avenue and we estimate to pay around 500,000 dollars in one year. To enhance the service delivery we will have a research and development site. It will serve as being the technological, developing and maintenance site for the startup. In regard to the human resources well will have a number of managers and they will be assisted greatly by the other junior employees. We will also need to undertake a technology setup and thus the need of setting up a website and look for customers. 8.1.2 Fund sourcing To make the startup a success we plan to get the required amount of money from individual contribution and bank loans. The profit projections in are expected to increase by 0.5 million dollars every year. 8.1.3 Future growth strategy We plan and hope that there will be a constant growth and parts of the profits will be kept aside to enhance future growth and expansion (Rhonda 2000). 8.1.4 Exit strategy In future, we plan to make use of the following exit strategies i. Merger with other inline stores ii. Initial public offering and iii. Acquisition by other online retail business operating in the same industry. References Frederick, G & Jeffrey, E 2004, ‘Imperatives for Venture Success: Entrepreneurs Speak, ‘International Journal of Entrepreneurship and Innovation vol. 5, no. 2. Pp. 99–106. Rhonda, A 2000, The Successful Business Plan: Secrets & Strategies, Oasis Press, Grants Pass. Read More