Entrepreneurial Venture - Shoe Cleaning Shop in London - Case Study Example

Entrepreneurial Venture- Shoe Cleaning Shop Name Course Institution Introduction This essay discusses the entrepreneurial opportunity of opening a shoe cleaning shop in London with the plan to expand it to other areas in the UK. It also includes discussions about the potential success and the possible risks of the business, and the subsequent rationale behind the decision to open it anyway. It discusses the brainstorming process, the arrival of the decision of the business venture, and the potential required investment in terms of financial and human resources. London is a big town with a population of 8.674 million as of 2015. It includes a background research about the consumer behavior through the study of their purchasing activities through the consideration of the number of receipts that are uploaded and the most commonly consumed brands. The discussion narrows down to the consideration of the specs of such a business venture and why it is reasonable to set it up despite the existing risks. The plan is to establish a Shoe Cleaning Shop in London. I plan to open a store with the adequately qualified personnel for the purposes of servicing premium designer shoes and regular shoes as resented by most Londoners. People in London are known for their willingness to invest in good shoes. The types of shoe stores in London are also proof of the most popular tastes of the population, and the subsequent investment made in the show business. The number of shoe stores is also proof of the popularity of good shoes and the importance the proper maintenance of such shoes. Most of them are highly priced and not the entire London population consists of the elite. In addition to that, some of the formal and casual shoes are made of delicate materials that need specialized care. The hard work lies in the adequacy of the marketing strategies to convince the potential customers to trust our services, especially since we are a startup. The success on the venture is ensured by the New Venture theory that ensures a reduction of the customer pain, a promise of subsequent gain, and a strategy with a basis. We serve as the gain creators that also offer the pain relievers through our shoe-cleaning services. The most comprehensive definition of entrepreneurship defines it as the act of the identification and exploitation of opportunities. The identification of such opportunities constitutes of entrepreneurship awareness, mindset, capability, and effectiveness. The venture theory follows a given series of steps that include value proposition, the formation of a business model, strategy formation, methodology, and organizational design[Oxf16]. The business is focused on shoe cleaning services such as extensive cleaning that involves internal and external cleaning of the shoe and the laces, scenting, cleaning of the sole, and weatherproofing the shoe. The other is renovation that involves he internal and internal cleaning of the shoe including color restoration, stain removal and the repair of scratches and damages. The other is custom design with regard to the renovation specifications, and the other is ozonisation. The plan is also for the business to focus on various cleaning capacities such as the removal of all the marks of wear and tear, minor defects, scratches, and salt dump patches. Other services involve the restoration of change of the shoe color, refreshing the leather of leather-made shoes, and shoe weatherproofing. Ozonisation is also part of the package with manuals to the customers with regard to the importance of shoe ozonisation. The brainstorming process includes personal research in magazines and the internet about the nature of the market the consumer behavior, and the demand for such shoe cleaning services. Further research is done where I consult with some of the employees in some of the cleaning shops disguised as a regular person in search of the services. That way,, I gather information about the average rates of running such a business and the cost of employment of skilled employees. They tell me the average salary and the common blunders made by inexperienced shoe cleaners. I also gather information that most business closures in the city happen as a result of inadequate capital to stand the law starting season and the additional rendering of insufficient services. Such events ruin the reputation of the new business and most experience negative growth and eventually close down. Nature of Business Environment The first step is the consideration of the nature of the shoe business in London. There is the realization that there are many shoe stores in London and a population that is willing to spend on a good pair of shoes. Many designer brands and established brands also have stores in London as well. Stores such as Church’s, Harrods Shoe Salon, Irregular Choice, Kurt Geiger, Nicholas Kirkwood, Old Curiosity Shop, Poste Mistress, Russel and Bromley, and Selfridges Shoe Galleries are some of the many popular shoe stores in London[Tim15]. The stores cater for various needs and tastes with some offering unusual fashion while others offer the most trendy and new fashion. Taking the London Fashion Week into consideration, I realize that when it comes to uniqueness, authenticity, trendy fashion and luxury, the shoe stores in London shoe stores are all round. The shoe shops in London are strategically positioned in the streets with stable online platforms for further marketing to non-Londoners. The customer service is almost perfect in most of the shoe stores and the customers have a variety of stores to choose from. A number of the shoe stores offer shoe cleaning services and the variety of products in the shops reflects the diversity of the skills in the cleaning services. The popularity of London as a fashion hub also increases the customer base, especially during events. People from other towns within the UK are attracted to the products of the stores in London and they either order their products online or visit the stores themselves. That means opening a new store has high chances of discovery. The people whose finances are limited and luxury is done with care, their saving goals are to shop in such stores. When such shoes wear or tear, such customers prefer to have them restored as a result of the financial demands of purchasing a new pair. Even those who are not rich dream of affording the shoes from the famous stores and they purchase from the stores immediately they can afford it, although that is not always the case. However, most of the shoe stores and cleaning shops have a common characteristic, which is luxury. They shoe shops have wonderful designer shoes that are well made, unique, but also highly priced. Most of the shoe stores in London only cater for the elite and some of the members of the middle class. Some of the stores add goodwill to their products and others are simply priced that high because they are established enough to do so without consequences. As a result, that presents an opportunity for me to establish a different kind of a line of shoe services, and that is shoe cleaning. The population below the middle class is not really considered by most entrepreneurs that open shoe stores in London. Investors are willing to invest a lot of money into the business to open luxury stores because of the magnitude of returns of such stores. The competition is relatively high with shoe cleaning shops such as the Shoe Spa and Elias Cleaners taking the lead. They are established and old with a stable customer base with royal customers. The James Shoe Care shop, for instance, is a shoe-cleaning and restoration company that is a family-owned business. The conclusion deduced from that is the capital required for startup was high and the most affordable method was my making it a family business. The James Shoe Care shop is also old as it was established in 1979. The challenges of starting up are considered with regard to the different regions of the London city. I consider the challenges with regard to the competition of the types of shoe stores and the areas with the higher likelihood of success. The purpose is to ensure that the risks are minimized for the startup and the chances of success are maximized. For instance, Lambeth, Camden, and Westminster have the highest startup rates. Most micro-businesses and small businesses are situated in Camden and Westminster in total. However, Lambeth has the most micro-businesses among all boroughs of London. Newham, Barking and Dagenham, and Westminster are not ideal for startups and the establishment of such is likely to fail. Sutton, Bexley, and Richmond are better suited for startups[Dun16]. The other is in convincing the service consumer of the reliability of our services. Such businesses as the shoe cleaning business are run on trust and goodwill. That is because the customers entrust their valued shoes to the cleaning and repair services that may also include slight re-structuring and coloring. Such processes are delicate in their own right and they thrive on perfect services and trust. The more known shoe cleaning shops are likely to receive trust from new customers more readily than completely new service providers. Finding the appropriate skilled personnel in dealing with professional shoe cleaning is essential to ensure that the customers walk away satisfied with the services. Blunders are not a choice because one blunder means that the business finds it even more difficult to get on its feet. That means that the investment of the startup should also direct a great deal of the finances to the service providers. The employees must be skilled and if possible, experienced. It is for that reason that the wages are projected to have the potential to take up a large percentage of the initial startup fees. Risks The greatest risk for the business is the financial risk. As a startup, the money needed for startup is quite high. As a sole proprietorship type of business, the financial strains may surface in the course of the business, especially if it does not pick within eight months. The money is enough to accommodate losses and extra expenses in the startup. However, the funds are limited despite polling resources from bank loans, personal savings, family members, and friends. I have set the limit of personal investment using my savings even if the business seems to go down the drain. Some of the greatest blunders of entrepreneurs is the over-extension of credit cards and the excessive digging into their credit cards[She16]. There is also the market risk with regard to the accuracy in the determination in the customer needs and the creation of a plan that avoids the risk altogether. Managerial risks come when the business managers are incapacitated to handle the business affairs and determine the smartest courses of action. As a former business student, I have the basics in overall business management. The conceptual knowledge is instilled in me. The practical part of the knowledge is also part of me because of the various clubs in which I served as manager during my school life. I am also very active in volunteer work during summer, which equips me with the skills to handle customers, enhance employee-employer communications and relations and maintain a balance between the professional and the social aspects of the business. Final Decision Taking into consideration of the pros and cons of the business, I feel confident with starting the business. There are numerous uncertainties with regard to the success of the business and the possibility of massive losses. The losses have the potential impact to leave me in massive debt that I must repay using my own savings. Such cases are even more possible in instances where the business shuts down and the inventory lays without utilization whereas the members of staff expect the full compensation of the services offered during their time as employees. On the positive side, the ultimate establishment of reasonable customer loyalty by a few is enough to get the business going and at least pay the immediate bills such as the rent, wages, and the purchase of new inventory. The success of the online platforms is the ultimate way of inviting people that are far from the shop for the services. That is because for such people, the accidental bumping into the business is unlikely as a result, the lack of the establishment of an online platform. Part of the marketing strategy is to offer frequent bonuses free trial services, and premium services at subsidized prices for first-time customers. The business shall run to cover all classes of people and all products. Therefore, the plan is for different pricing for different products. However, we shall offer the regular customers some bonuses and also advertise for bonuses for all those that bring in new clients into the shop. That must be covered in the marketing budget. Fifteen percent of the UK population consists of the precariat class (the poorest and most deprived). The established middle class is the largest single class and consists of twenty five of the UK population with the traditional working class consisting of fourteen percent of the entire population[BBC13]. Other significant investments are directed towards the employment of skilled employees to ensure premium services. That means that I have to get some of the employees from the already existing cleaning shops where they already have stable jobs. The capital investment in the wages of such employees is significantly high and different from that of the new employees. However, it is important to use subtle methods in acquiring the employee from one of the famous shops to avoid bad-mouthing and the spread of negative propaganda with regard to the new business. It is essential to consider the types of employees so that they may tag their loyal customers along. Such service businesses come with customer attachment to the service providers because of the sensitivity of the businesses. Most of the products that they bring are valued possessions some of which that hold sentimental value and attachment. As a result, the customers hope for the best when they bring their shoes for repair and cleaning to new cleaners. It is for that reason that the business faces the risk of running at losses for a long time. However, with the presence of two or three employees that were previously employed at the famous shoe cleaning shops within London puts us at an advantage. In addition to that, there is the quick establishment of customer satisfaction and the subsequent loyalty upon the first interaction with the services. The other thing that should put us at an advantage is the provision of service to all classes of people. That is possible through the provision of various services at affordable prices depending on the type of customer and the types of the products. That means that the less expensive brands are charged a little lower with comparison to the more expensive brands. The online platform should also play an important role in raising awareness about the shoe cleaning shop in London. After a year of operation, it is important to partner with shoe designers to promote the services offered at the shop. It is also essential to partner with various other shoe stores in London for reference to my shoe cleaning store when the products purchases at those shops start to wear out. If possible, the renovation services could be presented at the outside stalls of the London Fashion Week. The London Fashion Week displays should be accompanied with free minor shoe-cleaning services for proof of the professional skills of the cleaners with regard to handling different materials and designs. That way, people get interested at the services and the creation of relationships with the customers is established. As observed in the consumer culture of the Londoners, the purchase of quality shoes is of central importance. Therefore, the subsequent care of such shoes is of equal importance. It is for that reason that despite the numerous financial, marketing and operation risks faced by the new shoe store, the business is likely to experience success. That is because the determination of the team and the business awareness involved are enough to push the business beyond the regular limits to even start running at a profit within a year. Conclusion The shoe cleaning shop is faced by numerous potential success factors, and even more risks. The city of London is established where most startup locations are expensive and faced with the common challenge of competition and financial constraints. However, succeeding in a business is all about taking such risks and making the most remarkable effort to outdo the competition. The risks related to employer qualification and the personal customer loyalty to the service providers shall be solved by the employment of skilled cleaners with reasonable loyal customers. The competition within the shoe cleaning business could be addressed by setting up a shop that represents luxury and class. Such physical representations boost the confidence of the customers in the services of the shop because most of the products taken for cleaning are usually expensive. Therefore, the physical impression is essential for the attraction of the high-end elite. However, the advertisements should also include discount packages and lower prices for other products and customers that need the discounts. That way the shop attracts customers of all classes, with the enhancement of the online service and marketing platforms to reach customers from various areas of London and even beyond. References Oxf16: , (Oxford Brookes University), Tim15: , (Timeout London), Dun16: , (Dunsby), She16: , (Scott), BBC13: , (BBC), Read More