Operating a Small Business

Start Up a Small Business

KaToya Jones

Dr. Johnny E. Maddox

Entrepreneurship Feasibility and Analysis

January 28, 2018

Propose the value proposition of the product or service the business will offer and explain the rationale

Beginning a business is not a matter of just waking up one day and venturing into any available opportunity. It involves lots of analyses on the possible areas in which a best deal can be obtained. The success of any business is dependent on its value proposition to the target customer. In other words, the targeted clients need to find a reason to always come back to the business; this is what leads to the creation of a strong value proposition for a new startup (Allen, 2011). 

For this case, the business will be a retail business, which will mainly be a service-based organization. Several business organizations exist with customers having a lot of options in terms of selection of the product of their choice. At times, it becomes difficult for customers to choose the product they want as a result of the varieties which exist in the market. There have been lots of similarities in products being offered by different companies with very small and simple things being the differences between or among products. A good example to effectively describe this scenario will be the Smartphone market. Techno and Oppo are two great competitors within the smartphone market. Each of them produce various smartphones that makes it difficult for customers to choose. The Oppo F5 and Techno Phantom 8, for instance have several similarities with few differences. The following business will be thus aiming at providing distinct differences between products to ensure customers can make informed decisions based on the commodity they have. The company will offer high attention to customers and their needs which will be the key value aimed at ensuring the customers will always come back to the business.

The value is anticipated to be effective as many customers exist globally with products also being available on a global scale. Many customers also face difficulties in purchasing certain products especially within the electronics line of business. Offering such consultancy services that aim at helping the customers will thus be a key value that will make clients to regularly visit the business. Other than having a physical store, the company will also have an online store which will be important in serving global customers or those who find it difficult to reach to the physical premises.

Competitive market and industry in which the business will operate

Marketing is all about competition and to gain a competitive edge depends on how one gets into the business. The business as stated previously will operate within a retail industry among the consultancy firms. There are several organizations which have been developed to offer consultancy to the customers in making sure they make informed decisions based on what they need. Most organizations offering consultancy are, however, focused on a certain line of business. For example, some will solely offer consultancy services on electronics while other may deal with issues related to corporate social responsibility, in helping companies to come up with effective CSR policies. Consultancy services are also available in environmental based companies.

Competition is also expected from different online established markets that purely display products and deliver them to customers. Most of these online stores have several descriptions of the products, but it is up to the customers themselves to make a choice on what product they need. Various producer companies also engage a bit in making sure customers are satisfied with their products. One way they do this is by offering consultancy services to the customers on the best products to purchase based on their needs and wants as well as prices.

The business will thus need to look at all these sources of competition to ensure it develops a strategy that will come up with an effective competitive advantage against most of these firms. The business will even so provide consultancy services to clients with respect to all products, and this will act as a competitive edge over those companies which offer certain specific consultancy services to the customers. The business will also be aiming at becoming more customer-friendly by providing a bit to bit description of products and also helping customers in decision making based on pros and cons of every product they need to purchase. Focusing on these strategies will provide the business an edge for competition within the market.

The branding

Branding performs an important role in any organization as it creates a unique image and name for a product within the minds of consumers. Branding performs an important role in attracting as well as retaining of customers. Brand protection is thus mandatory to ensure frauds do not taint the name and image of the company in any way. One major way in which the business will protect its brand would be by protecting the reputation of the brand across all digital channels and more so the social media. Despite the fact social media has been important for companies in terms of marketing, the same social media can be used in creating propaganda and false information concerning companies. To protect the brand of the company, there will need to have a strict assessment across all social and digital media networks in attempts to ensure the reputation of the company remains excellent in the view of customers.

The second strategy that will be employed in the protection of the company's brand is making sure the business' partners are compliant with the brand's guidelines. The business will have different partners, bearing in mind there isn’t a product in which the business is selling but rather offering services to customers that will helping in clinching the best deal based on what they need as well as their finances. Collaborating with companies which produce the products is thus expected (Allen, 2011). To protect the business’ brand, it is therefore mandatory for the partners to remain compliant with the guidelines associated with the brand. This is important in creating and maintaining a constant brand experience across the digital media.

The logo

A logo is a simple image that gives an entire summary of the business by just a one look. It involves different colors, fonts as well as exclusive graphical features that act as a testament to the brand. Protection of the company logo is thus as important as brand protection. The first strategy of logo protection involves a general search of all logos to ensure it does not match or doesn't look similar to any other. For this case, there will be needing to carry out a global search bearing in mind the business is expected to grow and develop with time, such that it will as well serve the global community. The second strategy involves logo assessments which are aimed at making sure the business logo is only used by this business and no other parties. In this way, the company is able to keep vigilance on its logo from other companies and frauds that may try to use it for their gain at the expense of the company.

The product technology

Product technology is important in making it difficult for other firms within the industry to copy and embrace. The business will label the company's product technology as intellectual property to acquire the rights of intellectual property. In this way, the product technology will be protected. Secondly, the product technology will also be kept as a secret among the founders of the business to eliminate the risk of the technology being accessed and understood by other employees, who in the end may leak the information to other competitors or even use the information for their gain. The circle will thus be kept small to ensure only the founders understand all aspects pertaining to the product technology. In this way, the technology will be effectively protected (Da Silva Lopes & Casson, 2012).

Methods to test the product idea for feasibility

There are several ways in which the feasibility of the product idea may be tested. The first method will involve service evaluation; this will be aiming at understanding the purpose of the service, consumer behaviors, and possible purchasing habit. There are firms already existing within the industry in which the business is expected to work in. The evaluation can be done in these firms and observations on how customers behave can be made. These observations will be key in deciding as to whether the product idea will be profitable or not.

Secondly, identifying the customer base for the service would be a significant method for the feasibility test. It is important to note that an idea can be feasible to an entrepreneur but fail to be of any importance to the customer base. There is need to get the perceptions and views of the customer rather than an owner perceiving to be the customer of the product. Getting actual views from the customers would thus rule in favor or against the product idea profitability.

Resources needed for the business idea should also be determined to understand the feasibility of the idea. It takes a significant effort to convert an idea into something operational. There is need to determine all the costs that will be associated with the idea to see whether it is a feasible idea or not.

Three strategies to incentivize the founding management team

To incentivize the founding management team, first, there is need to focus on the problem in which the business is planning to solve through its services to the targeted customers. The expected management team need to see a real opportunity existing that will attract them into the idea; that is why it important to focus on the problem. The second strategy to incentivize the founding management team will involve providing them will provide a demonstration of an existing business process similar to the business idea in this case. This motivates the founding team as it shows them that the idea is possible to be implemented. The third strategy will entail helping the founding team in figuring out how they can help in terms of processes and tasks in which they can do. When people see their actual contribution to an idea they tend to embrace it effectively (Hughes, Williams & Ren, 2012).

Estimate the amount of cash needed to start the business

Being a startup, a lot of finances will be needed in establishing the business. The following table shows the budget for the entire startup.

Item	Amount
Renting physical phase	12,000 USD per year
Network installation	1,500 USD
Assets for the physical space	100,000 USD
Costs of marketing and adverts	10,000 USD
Wages for employees	100,000 USD per year
Total	223,500 USD

References

Allen. K. R. (2011). Launching new ventures: an entrepreneurial approach. Cengage Learning

Hughes, D., Williams, T., & Ren, Z. (2012). Is incentivisation significant in ensuring successful partnered projects? Engineering, Construction and Architectural Management, 19(3), 306-319.

Da Silva Lopes, T., & Casson, M. (2012). Brand protection and the globalization of British business. Business History Review, 86(2), 287-310.