To Set Up an Electronic Equipment Store - Case Study Example

Feasibility study to set up an Electronic equipment store E-MaXx Background about the company E-MaXx for Electronic Products and Services is a new established shop in Dubai. At the beginning of this business, the main branch will be in Al Barsha. I am going to start this business by opining one main branch and after 6 months, I am going to start expanding within the seven Emirates. I will start opening branches in the big cities such as Abu Dhabi, and Sharjah. Also, I will open branches in the most active malls in these Emirates. I aim to place E-MaXx for Electronic Products and Services at the same position of Sharaf Electronc Shop. However, this could happen after 1 to 2 years of operating the shop. E-MaXx will offer a wide range of Electronic Products and Services including the most advance technologies and devices such as mobiles, TVs, radios, Mp3, computers, laptops, cameras, ipads, GPS, electronic equipments for house and office uses and lots of other electronic products. Also, E-MaXx will offer a service of marinating the devices through Electronic Care Unit. To create such business and do well, lots of steps and procedures should be taken into consideration. This may cost me high capital; however, good organization and planning may return the paid capital into profits and outcomes. In this paper, I am going to plan comprehensively for setting up this business starting from its initial preparations to the needed steps after opening the store. Motto E-MaXx is the best innovative electronic products and services providers All your needs are at your hand Project Name E-MaXx for Electronic Products and Services Demand Market of the Electronic Equipments Analysis by Dubai Chamber of Commerce regarding the demand electronic equipments shows that the demand is likely to increase. Sales of consumer electronics are projected to increase from $3.14 billion in 2011 to 43.97 billion by 2015 (Lueken, 2011). This implies that establishing an electronic store is a good idea since the structural development of electronics’ market has remained afloat. The rise has been aggravated by popular electronic equipments like mobiles, TVs, radios, Mp3, computers, laptops, cameras, iPods, GPS, household electronic equipments and office electronic as well as other numerous uses electronic products. Over the last decade, the market for electronic equipments has increased exponentially in Dubai. The increase in demand has been as a result of strong household consumption, expatriate wealth in addition to the enormous number of tourists in Dubai who are likely to purchase the electronics. However, both retailers and wholesalers of electronic equipments in Dubai are facing the challenge of progressing systematically because of the rapid changing nature of the technology industry. Therefore, in this electronic store, I will be required to tackle challenges such as low profit margins resulting from competition, changing configurations of retail outlets as well as competition from local manufacturers and assemblers from foreign imports (Froy, 2009). Consumer Electronics Sales Forecast (2011-2015) Adopted from: Dubai Chamber Based on data from BMI Objectives Obtaining the license Recruiting employees Advertising the shop Satisfaction of customer needs Collecting information regarding Electronics equipments and prices Collection Information about the Electronics Equipments, & Prices Collection of information regarding electronics equipments and prices will be done by analyzing the availability and the set prices of various electronic equipments in already establishing electronic stores. Using of Questionnaires is a cheap method of collecting information from a potentially big number of respondents. After the defining the objectives of the survey and establishing the sampling group, a questionnaire will be written. Questionnaires will be randomly administered to various consumers enquiring the most commonly used electronic equipment amongst them. In particular, this data will be collected in areas where the main branch is being opened as well as in the areas being targeted for business expansion. In addition, more information regarding different prices and the electronic equipments will be collected through the internet by searching the information from the websites of the already established electronic stores (Froy, 2009). Moreover, I will create a website with a suitable domain as well as a reliable webhosting service. The store website will enable me advertise the store through the internet. Therefore, this store will be advertised through the internet, whereby my business proposals will be posted on the different business websites and also through the social networks. Furthermore, this store will be added to the advertising segment of the Dubai electronic business pages. The advertising segment will contain full page editorial regarding the store, its location and some pictures of the store’s products. Additionally, E-MaXx Store will have a direct link within the business links segment. By promoting this store on the business pages, the store will undoubtedly reap high dividends (Froy, 2009). License from Department of Economics Development In order to incorporate and register the store, the store’s registration application as well as the proposed name will be submitted to the Department of Economic Development (DED) < http://www.dubaided.gov.ae/English/reglcening/busreg/default.aspx>. Approval will be obtained from the licensing sector of the Dubai Department of Economic Development regarding the activities of the business and the trade name. The next step will entail notarizing the store’s memorandum of association within DED which will then be followed by filing the store’s document with DED and consequently I will be issued with trade license. Afterwards, I will register the Electronic Store with the Dubai Chamber of Commerce and Industry since this is a compulsory requirement. After obtaining the clearance to use the premises, I will prepare a name board in both English and Arabic. The fire and civil defense authorities along with the DED Licensing Department will inspect the premises (Eur, 2004). Labor Skills required The electronic store will hire Dubai workers. The people hailing from the store site and more preferably to the worker to make sure that there is promptness and the workers can work overtime if necessary. Another crucial reason is that individuals from nearest locality can without difficulty transport with their expediency because the electronic store is small, the working force will be needed from town itself or its environs. On the other hand, the electronic store will provide assurance to the employees such as good working conditions; all workers will be treated equally and there will be discrimination and they will be entitled to holiday and sick leaves. The working hours are between 9.am to 5.00 pm and any worker who works for more than eight hours will be entitled to overtime, facilities for a conductive maintenance of their health inducements and a lot of other benefits necessitated by the labor code, as well as benefits provided by the electronic store as a company (Rosetta, 2008). Management aspects The electronic store will be headed by the general manager and he will be responsible for the overall control on the store employees, marketing of the electronic products within the store, as well as the allocation of budget for the electronic store. Along with the general manager is a secretary. The electronic store will also have the Human Resource personnel and under him there will be the utility driver, security officer in addition to the massager. Additionally, the electronic store will have marketing and sales personnel and under the marketing and sales personnel there will be the purchaser. Eventually, the finance personnel, and next to the finance personnel there will be the accountant, who will be categorized as retainer since he will be rendering service just once every end of the month (Rigney 2006). The required personnel will come from the close by places. As soon as the business starts the normal operations, all the benefits will be given to each and every employee. The electronic store shall hire more employees after operating for six years and this will be based on the projected increase of the store’s sales. The workers will be paid at a minimum starting salary and will be raised to ten percent yearly. The starting salary will be 5000 Dirhams, monthly. Marketing Aspect The proposed business idea is based on the perception that people within these regions have a difficult time in accessing electronic devices from nearby localities. The demand of the supply shall be based on the total population in these regions and the supply shall be based on the existing competitors in electronic stores. A market share of more than 50 percent is available for the electronic products within this region (Whitehead, 2005). Financial aspect The financial requirements of the project shall be sourced from the personal savings as well as personal loans from the banks. The collective finances will contribute adequate funds for financing all expenses to be incurred during the pre-operating period as well as during the initial half on the year usual operations. All electronics from this store will be sold on cash basis and sales are on cash discount basis with term payment of 5/15 net 30. The liquidity ratios of this project are calculated to be 6:1, 8:1, 10:1, 12:1, and 15:1. On the 1st, 2nd, 3rd, 4th and 5th years, respectively, this illustrates that the project can liquidate its total present liabilities very adequately. The rates of return on investment for the initial five years of usual operations are 16.32%, 30.81% and 39.35% respectively. For as long as the return of equity is bigger than zero (0), the electronic store in particular earns income or, on the hand, breaks even.  Shortly stated, the firm operates within a constructive performance.  Therefore, the project is financially feasible (Rigney 2006). Conclusion The electronic store is aimed at providing electronic equipments at these localities at fair prices and with decreased transport costs. The business venture will provide a great contribution to the government since there will be money that will be generated in form of taxes. The taxes may be paid in various forms. Through the introduction of this business, customers will be offered more choices for the same products. The suppliers of these electronics can increase its profitability. The competing products can also reduce their procedure due to the increased number of competitors in electronics business. Furthermore, unemployment within this region will decrease through providing employment to people when they will be hired and this will improve their lives and the society at large (Whitehead, 2005). References Rosetta, W. (2008). Electrical Stores, Volume 40. Michigan: University of Michigan. Rigney, J. (2006). Training corrective maintenance performance on electronic equipment with cai-terminals: feasibility study. Los Angeles: Defense Technical Information Center. Eur, P. (2004). Far East and Australasia. New York: Routledge. Froy, S. (2009). Designing local skills strategies. New Delhi: OECD Publishing. Whitehead, J. (2005). Planning the electronic office. California: Taylor & Francis. Lueken, C. (2011). Chamber of Commerce, Dubai, UAE. < http://www.360cities.net/image/chamber-of-commerce-dubai?utm_medium= >. Read More