Setting up a Computer Business

People often complain about the lack of availability of cheap computers and computer parts. This is because large companies like PC World are raising prices but they are doing it very slowly so people don't notice. For my business studies coursework I am going to place a computer superstore in the Prescot area. There are many different things I can add into my Business for example: 1. Set up a computer superstore 2. Set up a computer repair service 3. Set up a mail order service 4. Setup a combination of them all

The advantages of setting up a mail order service is that you do not need a large place in which you will have to sell the products from you could simply buy a warehouse where you can store all of your hardware. This also means that you can stretch your business to a much bigger area because your customers can order over the phone or over the Internet. But however the disadvantages are that most of the people will not be calling just for an impulse buy I will have to spend a lot on advertising, to make sure that I will get more orders to cover the running costs. Another high cost will be the cost of the delivery and this cannot be added to the price of the computer otherwise the price of the computers will be roughly the same as the larger superstores and that could be bad for business.

The advantage of setting up a computer superstore is that it would be a place where many people could walk around and look at different types of computers. I would have to hire well-trained staff to help them with decisions. A well-advertised superstore would attract people from all over the country. The disadvantage of a superstore is that you would a large area in which to situate your business this would mean that your capital investment would have to be fairly large. Which is something that I would want to avoid, when starting off a smaller business. It would also mean that I would have large staffing costs, this could turn into a cash flow crisis as it adds up over the months.

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In setting up both businesses I would have a much larger business, I would also need a much larger initial investment, this is a big risk, but if all worked out would be a risk worth taking. This would mean I would have a much larger target market and this would also mean higher month-to-month running costs. One advantage of combining the above businesses is that I will not need an extra warehouse to store the equipment for the mail order service, it would just be took from the stock from the computer superstore. People would not have to wait long for their computers, as they could be delivered via next day delivery.

In setting up a computer repair service it would be the cheapest of all the options because I would not need to purchase all of the hardware to get it up and running. There is a great demand for computer literate people to go out and perform on site repairs of computers, unfortunately the training would be very expensive and to service a large area, you would need a lot of staff. This would mean higher month-to-month running costs. The biggest disadvantage of this is that if you were working on a job, and at the end of it if I didn't manage to fix the problem then I would not be paid and I will have just wasted my time when I could have been fixing something that I could have been paid for.

I have decided to choose the computer superstore with a mail order service running in its background. This is because it is the easiest option to set up in the beginning and as most businesses fail in their first few years of trading, I want my business to be up and running as soon as possible. I want to make it large enough to compete with other businesses and therefore have the advantage of economies of scale, but not too large otherwise I won't be able to cover my start up costs. It would be no good selling my computers at a price that was not competitive, as this would lose sales.

I am confident that I can make my business successful with careful planning and good management. The biggest problem that I am going to have to overcome is that my computer parts are going to decrease in value very fast so to ensure that my business is making a profit; I am going to have to shift my goods very quickly. Hopefully in will be able to shift them through the mail order service this will mean they will not spend time decreasing in value. To complete my work I am going to need to find a place in which I can situate my business and find the best prices for the computer components I am going to buy.

Research

There are two types of research that are available to me; they are field research and desk research. Field research involves the collection of primary data; this is information no one else has collected. Desk research is also known as secondary research because it is information someone else has collected. An example of primary research is a questionnaire, this is useful because you can ask the exact questions that you want to ask and thus gathering the specific information required, secondary is often old and sometimes incorrect. The main disadvantage of field research is that the amount of time it takes to do. Businesses often spend thousands of pounds in labor doing market research.

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