Business & successful
I have been set a business studies assignment to set up a new retail business in my area.I already know that similar shops already exist and that I will have competition.I hope that my business will be successful and that there will be room in the market for my new shop.
My new retail business is going to be a sports equipment shop. It will only stock sports equipment like cricket bats and hockey sticks. It will no have things such as sports apparel and other clothes. The new shop will be located in the middle of a town (Ramsgate) and be open all year round.
I got my sources of knowledge from producing questionnaires. I gave the questionnaires to a cross section of society. I gathered all the questionnaires and compiled the results to produces different tables and graphs. The Internet helped me in finding out where different competitors were and what there prices are. Also it helped me to find what a suitable location would be to set up the new business. My Business Studies GCSE 2nd edition textbook, by Alain Anderton, helped me to find out different information like constraints on the market etc.
I think that one constraint I will occur on my business is that the cost of house prices may go up so buying or renting a shop may be more expensive than at first I had imagined. The only problem i have occurred is that my business will have to be confined to Thanet. I think that my business should be a sole trader business. This means that it is only run by a single person (me) who has unlimited liability. Being a sole owner has many more advantages than disadvantages. The advantages of a sole ownership are: It is easy to set up and also it is easy to run. Tax advantages, a sole trader is taxed in a different way to other types of business.
Control, the owner is in sole charge and so can make whatever changes are necessary as the business operates over time. Capital, a business nearly always needs some capital to start trading. Profits, all the profits of the business are kept by the sole trader. They don’t have to be split up amongst several or perhaps even millions of other owners or shareholders. This means that there is a link between effort, success and money earned. The harder the sole trader works and the more successful the business the more can be earned. Privacy, only the inland revenue and customers and excise need to know how well a sole trader is doing financially.
The business doesn’t have to publish any information, which could be seen by the general public or other businesses. Labour relations, the larger a work organisation, the bigger the scope for misunderstanding and problems. Many sole traders work on their own. However sometimes business work in small teams so the relations between the workers and the employer are likely to be good. Flexibility, many sole traders have some choice about when they work. The disadvantages are: Unlimited liability, this is a legal obligation on the owners of a business to settle (pay off) all debts of the business.
In law, there is no distinction between the assets and debts of the business and the personal assets and debts of the owner. Lack of continuity, there is no guarantee that the business will survive when the owner wants to stop running it. They might be able to sell it to someone else. They might pass the business along down the family. However the business could simply stop trading and all its assets. Illness, if the owner were to have a long illness, then they might be forced to shut the business. The income and profits would then stop. Long hours, many sole traders work very long hours to keep their business afloat.
People may decide to work different days of the week to keep business going e. g. open on Sundays. Difficulty of raising capital, some people have the money already to start up a business. They might have some redundancy money, for instance. Most small businesses, though, find it difficult to get suitable start up capital. They also find it difficult to get money to expand their business. Limited specialisation, one person being many things like a lorry driver, a building labourer, an accountant, a receptionist and a secretary amongst other jobs. A larger business however could afford to buy in specialist workers.
A supermarket employs shelf stackers, accountants and lawyers so some sole traders may find that the costs are higher than those of a larger business because they can’t gain the advantages of the division of labour. Limited economies of scale. Say the sole trader hires out lorries by the day. A large construction company would own its lorries because this is cheaper if they are kept in use all the time. But the sole trader may only need lorries some of the time. This is an example of economies of scale. In general the larger the business the more scope there is to reduce costs per unit produced.
Sole traders are nearly always small businesses. So they often don’t have the cost advantages that large businesses enjoy because of large-scale production. Orange wants to reach a large number of consumers and it has a large advertising budget. It can afford to advertise on television – an expensive medium. But it also uses magazines, newspapers and billboards. Its advertising slogan, “The future’s bright, the future’s Orange”, is designed to encourage consumers to want to use a mobile phone, a technology still of the future for most people.
But it also implies that Orange, rather than any of the rival networks like Cellnet or Vodafone, is the network of the future. If Orange wanted to recruit an accountant, however, it would be very wasteful to use television. The style of the advertisement would also be different from one selling a phone. It could use a jobs section in a quality newspaper like the Financial Tomes or The Sunday Times. Alternatively, it could advertise in a more specialist trade journal like Accountancy Age, a small business wouldn’t be able to afford television or a national newspaper.
It would want to focus its advertising, using media which was affordable and which reached its target customers. Businesses in Thanet are very different to those in Canterbury. Canterbury is a city whereas Thanet is a district. Canterbury attracts thousands of tourists each year to its old medieval city and Cathedral. Thanet also has its fair share of tourists but no where near as much as Canterbury. Canterbury is overall a more expensive area with its average house price of i?? 128,912 where Thanet’s average house price is i?? 92,812.
My new retail shop is going to be only sports equipment not designer clothes etc. E. g. Slazenger cricket bats and Wilson tennis rackets NOT Adidas tracksuit bottoms or Nike winter coats. There is no other shops in the area which specify in just sporting equipment. There are a few shops in the high street like First Sport and Warreners who have very limited sporting equipment but specify more in designer clothes e. g. Adidas tracksuit bottoms. I feel that I will have no competition in the area as there is nothing like my business retail anywhere else.
My business retail will have sporting equipment for both men and women and also for children. As my business will be located in Ramsgate I will have to think about the different pricing policies. This is because Ramsgate (in Thanet) is a generally poorer place than Canterbury so I will have to think about lower prices for my products. Although Sports Mania is in Canterbury it still has low prices on its products. Sports Mania’s aim is to sell more products for a cheaper price than selling and average amount of products for a more expensive price. This is the method that I plan to use.