Establishing a New Business - Essay Example

ESTABLISHING A NEW BUSINESS Introduction Saudi Arabia is a country that one could easily secure a venture capital for an innovative project or even a business. The taxation regime as well has been found very favorable for the entrepreneurs since the taxation rate are quite low and the administrative burdens are light compared to other countries. In addition to the above mentioned advantages of setting up a business and not in other places, the regulatory framework of the country is quite friendly for a business and that the process of starting a business in the region has been confirmed to be streamlining for the past recent years (Murray-Webster, 2010). The country, however, has had very low level of bank lending to the small organized companies have been a drag on the entrepreneurship. The oil resources abundance in the country has been a hindrance to the development of the productivity as well as the innovation for the entire economy. On the other hand the opportunities that are available in the country that encourage one to start up business include; the significant investment in the research oriented tertiary education that provides the country with a welcome boost in the innovation for the country (Sadgrove, 2015). The government has shown increased capability for specific support for the entrepreneurial ventures. The current trend of the country in trying to diversify the economy far from its dependence on the oil project has greatly encouraged entrepreneurs in building a more vibrant sort of economy based on the businesses. Saudi Arabia was ranked among the top on the entrepreneurship barometer in the year 2013 simply because of the taxation regulatory frameworks. In an attempt to boost the business activity, the government has tried tirelessly to overcome the deficiencies in the financial sector. The country for some time has operated on investing in the economic cities as part of the diversified way different from the oil and has encouraged the foreign investments. Establishing a New Business On financing, a significant expansion of the volume of the public support has been made available. Such include the Capital of the Saudi Arabia Industrial Development Fund of 2002. The financial support schemes have increasingly incorporated a training element such that the entrepreneurial ventures are now better positioned to easily tap the private sources of funding even for future (Haksöz, 2012). The International Monetary Fund (IMF) has called upon the government to bring few changes in the banking sectors collateral for it to be able to boost the lending mainly to the entrepreneurs, which for some time have been too low. For the startup of my business, there are several credit institutions that would provide long-term terms to my business (Shah, 2009). They include The Saudi Industrial Development Fund that would offer a low coast long term and medium capital throughout my project. Alongside the provision of funds, it would provide technical, marketing and financial advice to the fund financed projects that enhance the chances of success. The public investment fund stands a good position to provide long-term loans to privately owned businesses that the commercial banks of Saudi fail to offer. In addition, the real estate development fund as well provides loans to individuals for the personal needs in the business setting just like The Saudi Arabian Agricultural Banks, which offer credit facilities to the agricultural related projects. For my unique business idea of plant/vegan milk to take off one carefully need to tap into an already existing markets realize that to be in an artisanal food business is indeed a prime opportunity. An insight of picking my pillars that I ought to build my business around that the plant/vegan milk is about not only fine milk but also really designing a business built on three pillars, which are experience, innovation and artistry. I should have someone responsible for each of the pillars for I believe in the success of the business to kick off. An insight of focusing on branding is important in this case, for there is need of spending close to 50 percent on branding for one of my objectives is the production of unique and special products. Learning from other operating businesses and industries would serve as mentorship on how different challenges are approached within other businesses. Financing could at times be tricky for businesses. Some funding is very good for startup businesses while others are good for already established business. For instance, bank loans to the national lenders and the community banks usually offer loans for smaller businesses in which their availability and convenience of the funding diminishes significantly over some period. In the case of small business, owner who have a strong credit history and clear cash flow the loans from the banks are usually a good option since they typically offer lower lending rates than other sources of funding (Campbell, 2005). In the case credit cards, actually, many businesses have been launched with great funding from the personal credit cards. It has been so because of the readily available money and that the personal credit cards portray the necessity to access than the traditional business loans. When one considers the benefits from different types of lenders, certainly it is important that one factor in the interest rates attached. In this regard, the credit cards have higher rates than the loans. In addition to this use of personal credit cards could at times be risky in funding a business. In case, a business fails one damages their credit cards, which, in this case, hinder an individual from ability to perform other needful activities in future that equally would need big amounts of cash. In this regard, credit cards should be considered as a type of business loan but taken as a backup source in financing process for specific requirements (Motarjemi, 2014). One also has to make sure that they definitely have some means for paying back the amount that are owned to prevent any sort of risks for business credit. A number of banks that offer loans also give lines of credits. This kind of funding inculcates flexibility, which is good in supplementing cash flow in case one wants to take an advantage of some specific business opportunity or intending to fund a necessary business kind of expenditure. Using the lines of credit in a business could be a good means of keeping track of the accounting as well as separating purchases from the business purchases. Obtaining the loans from friends of the family for small business owners. However, there are a few benefits attached to the type of funding. First, the funds are readily available at the time of immediate need once the terms are met (Chandrasekaran, 2014). Often for this type of funding, the interests’ rates are far less than those of the bank or even other lenders of cash. A business needs funding source, without it, a business will flounder on the weight of its own debts. Funds fuel the running and the progress of a business and so it should take various avenues to be able to attain funding which should not only entail one source but several sources. In choosing, the source of funding it will entirely depend on the desire to operate on debts or even how solvent the business owners are in the period of starting the business same to the amount of funding required for launching and maintaining itself in a variety of events. When starting a business usually profits are low and for this reason there is great need for seeking sources of funding to be able to allow the cash flow that will ensure that the expenses are met until the time when the profit tarts picking (Murray-Webster, 2010). In this case there a great need for drawing salaries in order to survive in the business would need employees who must be paid in the long run and that there are utilities that must as well be paid the insurance to pay and also a big list of other expenses that ought to be paid for the survival of the business. A cash flow statement for a business is very important since it is usually used in accessing the timing, the amount and the predictability of the cash flow in future and it could as well be useful in budgeting of the business. The cash statement stands a position in answering questions about where the money was obtained from or where the money has been used in the business setting. The cash flow statement contains the operating activities, financing activities, income flows and cash flows as well as the investing activities. A good number of people have allergy in milk and most of them have not yet discovered that it could as well cause cancer in future. Seedier is a type of milk extracted from plants that usually tastes like the cow’s milk and in the same time it has been found to be healthier since it contains minerals, proteins, vitamins and antioxidants and it is highly recommended for consumption at the expense of the other type (Shah, 2009). Normally 75 percent of the worldly population has been discovered to be unable to digest cow’s milk with their respective dairy products that are linked to risks like prostate cancer and the concentration of the saturated fat could lead to heart diseases. Gone are days when people used to milk goats or even cows. Today people can ‘milk’ seeds, nuts, grains and beans that give very healthy plant milk. There is a great reason why the dairy milk needs to be substituted for the plant milk. To start with, dairy cows live a very miserable kind of life. Artificially inseminated cows usually gestate for nine months as a human being do only to have their young ones snatched from the shortly after birth. Indeed all animals on normal occasions have the instinct to nourish and protect their young ones but in this case, the mother of the young one and the newborn are separated and suffer terribly in the separation (Duhigg, 2012). At some point, the young one becomes a dairy like their mothers where they are pumped with a lot of hormones in order to grow huge udders. In the same time, the male calves are sold to the veal industry one of the cruelest businesses. At the moment the dairy becomes worn out with constant pregnancies and continued milking they are slaughtered for food supply. On the other hand, the plant milks allow people to enjoy the milk and in the same time, not participating or even funding any sort of mistreatment to cows (Simon, 2009). Clinical research as well states that there is no protective effect of the increased milk consumption associated with fracture risks. Indeed, increased uptake of calcium mainly from the dairy products has been associated with a very high fracture risk. In addition to that, human beings are not able to digest the cow’s milk since they are not calves. Nearly over 80 percent of the global population has been found lacking the enzymes required for the breakdown of the milk sugars that are contained in the dairy milk and is accompanied by a very painful bloating, diarrhea and gas when being consumed. The fats in the milk usually clog the arteries and in the end contribute to the severe heart breakdown and diseases. In evaluating various plants milks in the perspective of nutrition, there are a few issues that one needs to consider: sugars, sodium, nutrients and carrageen. The product herein for business would compose of Soymilk, which has a smooth creamy taste one of the popular milks composed of 8-10g protein content per cup, often it is fortified with vitamin D and has calcium. In it are health protective benefits since it has phytoestrogen. On the other side, it is a common allergen and if eaten in big quantities it would be better not advisable. Hemp is a dependable source of Omega 3 fats and contains close to four times than the soy milk. It is easily digested and has in it many essential amino acids. From the nutrition perspective, the hemp is my personal choice. Rice milk contains some nutritional value and often is heavily sweetened which is best tolerated by a good number of people with allergies and actually worth for anybody’s consumption (Moskowitz, 2009). Coconut milk has been controversial that is why most people are anti-coconut. The coconut milk has very high levels of calories and fat. Indeed a glass of coconut milk contains between 90 to 500 calories depending on if it is canned or not. I will incorporate this with a lot of caution and with moderation of the coconut milk. Oil milk contains less protein than all other milks but of course contains a very high amount of fiber, which is healthy. It as well contains the relative amount of iron and calcium. The pricing strategy of my business bearing in mind that it determines my fate and to ensure profitability close attention for the pricing is hereby very essential. In business plans commonly, the pricing strategy has been ensuring that it gives the lowest price in the entire market, which is determined by a quick check of the competitors and assuming that having the lowest price would give a success to a business and as considering the demand of the product. On competitive analysis one does not only check on the competitors pricing but also entails looking at the whole package offered (Garlough, 2011). Ceiling price usually is the highest price a certain market bears this calls for a survey on experts as well as customers in determining the price limits. Price elasticity also determines the best price for the product. For instance, if the fall in product demands or the service, then one ought to have relatively high ceiling prices. The low elastic demand as well depends on the number of competitors, the perception of the customers on quality. Commercialization of plant milk enterprises really requires a very strong marketing strategy. To begin with there should be available procedures for testing of the milk to ensure quality, which is important for the good quality products. This is very important to the producer for after testing they expect fair prices of the quality of the milk produced. To the customer it is important since they expect to buy at a price fair and quite acceptable of the excellent quality. Normally, the political environment has a great influence on the regulation of any sort of business that spread the power of the customers inclusive of other businesses. Therefore, one has to be careful about the stability of the political environment because all businesses are greatly affected by the instability in the government a particular country. The government policy stands a chance of influencing the laws that for instance regulate the taxation that has a direct connection with the business operation. In addition, the government has a strong influence on the marketing of the product based on the governments marketing ethics. Interest rates within Saudi in the food industry are quite low. The government in this regard provides loans through banks. The long-term prospect of the economy GDP is relatively very bright. Up to date the economy has been developing and the peoples living standards has as well raised because of the encouraged foreign investments (Weber, 2012). Similarly, the social and the cultural factors have a direct effect on the business and likewise need a careful consideration. Such includes the groups in the country that frequently take milk. They occasionally need milk in their particular special occasions, which would greatly help in boosting the business. Technology is an imperative aspect of the running of any sort of business. In the country, it has allowed food as well as services to become additionally cheap and has improved the quality as well. The Saudi technology is very important and quite useful for preserving the plant milk even without refreezing. The technology is usually present to customers and business some additional pioneering services and products with high tech packing with the standard maintaining. Legal factors equally have an influence on the business of the seedia milk business. Additionally, the environment in which the business operates should comply with the rules and the regulations by the state government. Strengths that are attached to this business include a very high demand by the customers especially those that are very careful about their personal health (Simon, 2009). There is also flexibility in the product mix that is tremendous. The fact that the customers believe in the milk and its components and are satisfied with the flavor would actually keep adding on to the product in the markets for the customers’ consumption. The availability of the raw materials required in making the product would a big strength for the success of the business to commence. There is also technical manpower with professional trained personnel mainly for a smooth running and progress of the business in the line success (Fuller, 2011). However, the business would have the following challenges and weakness that ought to be keenly looked at. First, the perishing ability is a challenge to the kind of business to major on. Logistics in procurement is another issue because of poor roads and transport facilities which are insufficient this would cause difficulty in the seedia milk procurement in Saudi. However, with sufficient funds this issue would easily be solved. The competition in the country for similar products it would pose a challenge in the marketing and distribution of the product. Besides the weaknesses the business on the other hand has opportunities which when carefully looked at would cause a noticeable improvement in the success of the business of the seeedia milk as a product in the market. In the case of value adding, there is an extraordinary area of improvement in the goods growth, appearance and packaging. Actually, good steps have to be followed in ensuring that value added goods like the ice cream, tasted milk and sweets in guiding a greater number of customers and the suppleness within the market of the main product. The illustration shown below is of much importance to the success of the business. The supply chain management is based on the plan and the control of the product and the information flowing among the suppliers, warehouses, facilities and the customers with a main objective of minimizing the cost, maximizing the customer’s service as well as the flexibility. Usually the supply chain of any business process entails purchasing of the materials from the suppliers, transporting the materials to the facilities from the suppliers, the production of the goods within the facilities, the transportation of the goods to the warehouses from the facilities and finally, the goods transportation to the customers from the warehouses. The supply chain made up of all the above stages directly or even indirectly mostly fulfills the customers’ requests and interests. In testing the product, one would approach people in the target market and noting down their views about the product on sale. Actually, an ideal group size is of between five to eight people. One should ask the aspects of the product itself concerning the distribution strategy, the price, packaging, weaknesses as well as its strengths. It is worth doing not only once but also severally in many sessions to ensure a spread of good opinions. After interviewing people on the same, it is important that they are appreciated maybe with bottles of soda or even wine. Alongside this method of the information about the product, it is also wise to keep listening to those with very strong views. References Murray-Webster, R. (2010). Management of risk. London: TSO (The Stationary Office). Hakso, C., Seshadri, S. and Iyer, A. (2012). Managing supply chains on the Silk Road. Boca Raton, FL: CRC Press Sadgrove, K. (2015). Complete guide to business risk management. Farnham: Gower. Campbell, T. and Campbell, T. (2005). The China study. Dallas, Tex.: BenBella Books. Shah, J. (2009). Supply chain management. Upper Saddle River, N.J.: Pearson Education. Chandrasekaran, N. and Raghuram, G. (2014). Agribusiness supply chain management. Boca-Raton [etc.]: CRC Press. Simon, D. (n.d.). Meatonomics. Weber, D. (2012). The food truck handbook. Hoboken, N.J.: Wiley. Leonard, C. (2014). The meat racket. New York: Simon & Schuster. Garlough, R. (2011). Modern food service purchasing. Clifton Park, N.Y.: Delmar Cengage Learning. Fuller, G. (2011). New food product development. Boca Raton, FL: CRC Press. Motarjemi, Y., Moy, G. and Todd, E. (n.d.). Encyclopedia of food safety. Duhigg, C. (2012). The power of habit. Toronto: Doubleday Canada. Moskowitz, H., Saguy, I. and Straus, T. (2009). An integrated approach to new food product development. Boca Raton, FL: CRC Press. Read More