Feasibility Analysis

Assignment 1

Heather Daniels

January 27, 2019

Small Business Management

Dr. Adrienne Garabedian

Prospective Small Business

The prospective small business, in this case, will be an eatery. This is a business that sells food and soft drinks. In the modern world, people have become too busy to the extent that some of them do not find time to prepare their meals. This implies that they have to buy ready-made foods. For this reason, it is a good idea to set up a business that provides food to take advantage of this opportunity. As much as the industry is highly competitive, there is still plenty of room for new businesses provided they are unique and efficient. New entrants should be able to find the gap that exists in the current market as well as how effectively they can fill it (Morden, 2016). In this case, the business will be called Food Point. The name of the business summarizes its operations. When someone sees the name, they will already know the kind of products and services that the business offers.

Key Competitors

KFC and McDonald’s are among the top competitors of food point. They are considered competitors because they offer similar products and services in a similar market. This implies that they target the same customers and will try to outdo each other the interest of gaining a larger share of the market. As much as businesses in the same industry are considered competitors, they can take advantage of this by learning from each other to see how well to improve the quality of their products and services (Morden, 2016).

Strengths and Weaknesses of McDonald’s

One of the strengths of McDonald’s is its brand name. The company is recognized globally, and this makes it easy to penetrate a new market. It does not have to extensively market itself because it is already known across the world. McDonald's also enjoys financial stability. This is a strength because it enables the business to invest in other projects that it wishes. The company can easily take care of its financial obligations and this texting a step ahead of its competitors that are not stable financially.

Despite its strengths, McDonald’s has a weakness of high employee turnover. The company lacks efficient strategies that would help it to retain its employees. From time to time, new employees come and leave making the workforce inconsistent. For the interest of being effective, businesses must ensure they use effective strategies that enable them to retain their employees for a long time (Morden, 2016).

Mission Statement

The mission statement outlines the overall objectives of an organization. It gives an outline of the general reason as to why the business was established. The mission of Food Point is "To provide healthy and nutritious food and drinks to our clients at affordable rates." The mission statement confirms that indeed the business operates in the food industry because it focuses on the provision of food and drinks. In addition to days, the mission statement also informs the market that the business will provide healthy and nutritious food at affordable rates. In other words, the company looks forward to making sure that if clients feed on healthy foods and that they can also afford them. The business is concerned about the health as well as the financial condition of its customers. As much as businesses are established to make a profit, they should also be concerned about the well-being of their customers. They need to have strategies that take the needs of the customers into perspective.

Ownership form

Food Point is a sole proprietorship. This is merely a business that is established by an individual. This form of business ownership has its advantages and disadvantages depending on the perspective they are being looked at.

Tax Implications

Regarding tax, a sole proprietor is not required by law to file any tax returns. The only requirement is to obtain a license or a permit to run the business. No further tax returns are demanded.

Liability Exposure

Concerning liability exposure, a sole proprietor is disadvantaged because they are personally liable for business debts. The business is not separate from personal properties. This implies that personal belongings can be taken to cover business debts. The proprietors are personally liable.

Managerial ability

Managing a sole proprietorship is easy due to the size of the business. However, if it faces stiff challenges, it is difficult to manage because the sole proprietor might not have the required information on how to handle such a problem (Johan, 2011). Due to the lack of diverse knowledge, a sole professorship can fail as a result of managerial inability.

Cost of formation

A sole proprietorship is the cheapest business to form regarding costs. An individual only needs a little startup capital. No legal fees or costs are required. This makes it the easiest company to start. The owner needs an idea, a small startup capital, and a space to run the business. In addition to this, they will only be required to get a business permit or license at a small fee. Apart from this, there is no other legally required cost as far as this form of business is concerned.

References

Johan, S. (2011). Introduction to Business Management. Oxford: Oxford University Press.

Morden, T. (2016). Principles of Strategic Management. London: Routledge.