Making Money Online - Term Paper Example

Making Money Online Executive summary The business plan for the start-up venture provides an overview of how the business intends to raise its capital, produce and market its products. The venture will be the sole proprietorship, and I will be the owner and manager of the business. I will have an office in my house in UK and will be operating the business online. The purpose of the company is to offer an online platform for the vendors of jewels and stylish watches. I will display various designs on the business website and market the enterprise through social media. I intend to collaborate with various vendors to manufacture various models of the product depending on customer needs and location. Initially, I will be operating in the UK market, but intend to expand to the global market in the future. Table of Contents Executive summary 2 Mission 4 1.Introduction: Company description and ownership 4 2.Overview of the Organisation Structure 5 3.SWOT Analysis 5 a.Strengths 5 b.Weakness 6 c.Opportunities 6 d.Threats 7 4.Sales And Marketing Plan 7 Sales forecast for five years 8 Projected profit for five years 8 5.Business Operations and Management 8 Financial Projections 9 6.Finance (Cash Flow And Start-Up Funding Needs) 9 7.Risk Management 10 8.Measuring Success 11 The success of the start-up will be determined by its online penetration, vendor relationship management and the total value of sales volumes as well as revenue generated from the sales (Boothroyd, 2012). The strategic goal is to examine the number of vendors I have established, the distribution channels I can control, the number of orders I can satisfy and the volume of sales I can generate from each vendor during a given period. Also, I will evaluate the total revenue for each period, the increase in number of clients and particularly the repeat buys. Finally, I will evaluate the total cost against income in order to determine the profitability of the business (Sfetcu, 2014). 11 9.Summary and Recommendations 11 Bibliography 13 Boothroyd, A. (2012). Setting up a Successful Jewellery Business. A&C Black. Pp. 1-128. 13 Mission The business aims to offer stylish watches and jewels to the consumers aged below 35 years around Europe. In order to achieve its goals, the company will own where customers can view its products and services and make orders or share their comments. 1. Introduction: Company description and ownership The start-up venture will be specializing in online marketing and sales of jewels and fashionable watches for the consumers in the United Kingdom (UK). Initially, I will not maintain any physical store, but I will focus on vendor managed inventory. Through the use of vendor inventory management, I expect to minimize the start-up cost and ensure quick delivery of customer orders from the nearest vendor (Peterson, Jaret & Schenck, 2011). The initial capital for starting up this venture is approximately £12,500. As the business owner, I will be responsible for developing various watch and jewel designs according to the customer specifications. However, the manufacturing and distribution process will be completed by designated vendors located close to the customers (Brinkman, Navarro & Harper, 2014). The strategic objectives of enterprise for the next five years includes developing new unique designs for display on the business website and increase online penetration by drawing traffic to the website through social media penetration (Boothroyd, 2012). This document presents the budget for the start-up, description of the business and analysis of business competence in the market. I will market the jewels and watches through social media platforms such as Facebook, WhatsApp, Twitter, etc. Majority of the UK population have access to internet services through computers, mobile phones, and other Internet-enabled devices (Brinkman, Navarro & Harper, 2014). Also, majority of the internet users use social media to search for information about products and companies or link with their friends and relatives. Therefore, the use of social media for promoting start-up venture will capture most the target clients 2. Overview of the Organisation Structure The major cost consists of the start-up will include website creation and conducting market campaign, purchasing of designing tools and cost of sourcing for reliable vendors. The capital for the start-up will be from my personal saving and interest-free loan borrowed from a relative. Since I will be operating his business from home the start-up cost will be minimal and includes the following: Website creation fees, legal fees of running the running the business, computer and the internet set-up charges, furniture such as chairs, desk, and file cabinet for the home office, phone,various designing tools, etc. (Peterson et al., 2011). I intend various assortments of jewels and stylish watches to the consumers in UK including Earrings, necklaces, bracelets, rings, men watches, ladies watches, lip bars, tongue bars, belly bars, nose studs, labret and body chain jewelleries. As of 2014 the UK had a population of about 64.3 million people. The ratio of men to women in the same year was 31.6 million to 32.7 million (Longenecker et al., 2011). The per capita income of UK in 2014 was $34,327 per inhabitant. These imply that consumers have huge disposable income and form a considerable market for jewels and stylish watches. 3. SWOT Analysis a. Strengths The business requires low start-up capital. The source of business capital is cheap and has no interest charges. The cost of operating this business is low since it is linked with existing vendors to reach the customers across UK market (Bailey, 2013). The business can have efficient market coverage through the use of existing distribution channels. Since there is no physical store maintained by the owner, the business will have low operation cost. In addition, there is no limitation or stock shortage because the owner of the start-up will be dealing with various vendors to distribute the products to the market. b. Weakness The business owner has no actual control of business cost because he will rely on vendors to supply the products. The business owner will not have direct contact with the market to push the idea. There is no guarantee for success because this is dependent on how vendors will manage the distribution of products to the customers (Hatten, 2011). Also, since the business will depend on the vendors to manufacture its designs the owner lacks control of quality of the products. The start-up venture requires a strong brand to market the business. There is the probability of low retention of customers. Also, the owner may lack significant skills of running the company. c. Opportunities The use of existing vendors offers the business an opportunity to establish itself quickly. The business will have a chance to choose the most successful vendors through whom they can produce and deliver products to the clients (Hatten, 2011). Most of the UK businesses have no online presence while customers have increased their presence in social media hence creating an opportunity for large online clients. d. Threats The business is likely to experience stiff competition from other online businesses. Clients may not be able to distinguish the difference between the products of this start-up and those of vendors (Longenecker et al., 2011). The owner may not be able to attract considerable number of customers through social media hence it may not be easy to meet the target sales. 4. Sales And Marketing Plan I intend to spend the first few months in designing the website and attracting traffic to the business website. Also, I intend to carry out marketing campaign through social media to attract consumers to the business website and intensify awareness about the products (Tobin, 2012). Since I will be focusing on selling the products of other vendors and its designs, my venture will generate revenue from the commissions obtained from the sales and revenue from my designs. Sales forecast for five years Yr. 1 Yr. 2 Yr. 3 Yr. 4 Yr. 5 Sales: £19,301 £24,419 £29,659 £32,040 £38,340 Cost of sales: £6,895 £8,363 £10,670 £11,321 £13,526 Profit: £12,406 £16,056 £18,989 £20,719 £24,814 Projected profit for five years 5. Business Operations and Management I will be the sole owner and manager of the start-up venture. I have vast knowledge in online business which I acquired from my previous work and training. I identified a market niche in sales of stylish watches and jewels and decided to collaborate with existing vendors in order to enable me design and market these products cost-effectively. I will be operating online from my house from where I can take clients’ orders and coordinate with the vendors to satisfy the clients’ needs (Hatten, 2011). During the first year I will be coordinating all activities of the business such as taking clients orders, responding to the clients requests, promoting business through social media, posting contents about the products and services to the business websites and contacting the vendors to inform them of the orders and ensure the providers have attended to the needs of the customers. I will also be responsible for making various designs of the products according to customer needs (Tobin, 2012). After the first year of operation, I intend to hire another person to assist handle customer orders and manage social media accounts of the enterprise. Financial Projections 6. Finance (Cash Flow And Start-Up Funding Needs) The start-up will require a projected cash of £12,500. From the total amount, I will contribute 7,000 while the balance of £ 5,500 I will obtain it from my relative in the form of interest-free loan to be repaid as soon as the business starts generating some income. The breakdown of investments will be as shown below. Assets Office table £1,200 Stationaries 1,000 Computer and appliances £1,500 Operating cash £3,500 Expenses £5,300 Total assets and expenses £12,500 Owners’ Equity £7,000 Liabilities Interest-free loan £5,500 Total equity and liabilities £12,500 7. Risk Management Online business has various risks some of which can be minimized while others cannot be minimized (Bailey, 2013). For example, the financial risk. I will manage this risk by investing personal savings and interest-free loan to the business. Another risk is associated with failure to meet sales target the risk of failure by vendors to satisfy customer requests. I intend to intensify marketing through social media and secure more orders. I will make follow up to ensure the orders are fulfilled. Another risk could be legal and regulatory risk. In the business there are various risks due to failure of contract or engaging in illegal activities (Matthews, 2011). I intend to minimize these risks by complying with regulatory requirements and meeting the contractual obligations. 8. Measuring Success The success of the start-up will be determined by its online penetration, vendor relationship management and the total value of sales volumes as well as revenue generated from the sales (Boothroyd, 2012). The strategic goal is to examine the number of vendors I have established, the distribution channels I can control, the number of orders I can satisfy and the volume of sales I can generate from each vendor during a given period. Also, I will evaluate the total revenue for each period, the increase in number of clients and particularly the repeat buys. Finally, I will evaluate the total cost against income in order to determine the profitability of the business (Sfetcu, 2014). 9. Summary and Recommendations Having the website will play a critical role in the marketing of company’s products because the prospects can visit the web anytime to view new products and select the products of their choice. Also, I will develop a strong image that will enable the target client perceive the company as appealing and stylish. In addition, I will create effective advertising strategies through social media such as Facebook, Twitter and other media that targets the youth. Finally, I will establish outstanding vendor relationship to expedite swift delivery of orders. I intend to use well-established vendors to increase market efficiency and achieve large market coverage. To overcome the challenges of changing technology, I will ensure I acquire up to date technology and increase my presence in the social media to establish customer loyalty. Also, I will ensure I engage all appropriate mechanisms to minimize risks and maximize profitability. Bibliography Bailey, L. (2013).The Small Business Guide to Online Marketing: A step-by-step Guide to Growing Your Business Online. Harriman House Limited. Pp. 1-214. Botha, J. Bothma, C. H. & Geldenhuys, P. (2008). Managing E-commerce in Business. Juta and Company Ltd. Pp. 1-632. Boothroyd, A. (2012). Setting up a Successful Jewellery Business. A&C Black. Pp. 1-128. Brinkman, J., Navarro, I. & Harper, D. 2014). Unlocking the Business Environment. Routledge. Pp. 1-352. Peterson, S. D., Jaret, P. E. & Schenck, B. F. (2011). Business Plans Kit for Dummies. John Wiley & Sons. Pp. 1-360. Tobin, L. (2012). Entrepreneur: How to Start an Online Business. John Wiley & Sons. Pp. 1- 216. Matthews, D. (2011). Online Business All-In-One for Dummies. England: John Wiley & Sons. Pp. 1-608. Hatten, T. S. (2011). Small Business Management: Entrepreneurship and Beyond. Cengage Learning. Pp. 1-528. Longenecker, J., Petty, J., Palich, L. & Hoy, F. (2011). Small Business Management: Launching and Growing Entrepreneurial Ventures. Cengage Learning. Pp. 1-848. Sfetcu, N. (2014). Small Business Management for Online Business: Web Development, Internet Marketing, Social Networks. Nicolae Sfetcu. Pp. 1-140. Read More