Business
Every year hundreds of people in different countries across the world take a chance and try their faith and start their own small business, which requires a lot of hard work. But for those who survive, the rewards is worth a try.
An entrepreneur is an individual, who starts building up his business with limited amount of resources, knowledge, planning, who should always take into account all the risks, remuneration and rewards of his business venture. Business ideas of new start ups set up by entrepreneurs are usually new to the market – an innovation, product or service, but not the existing business model.S uch ventures desire high-returns, with high level of instability and uncertainty.
In United Kingdom, as I know, the number of small and medium-sized businesses is about 99% of all private sector businesses. That is more or less 55% of all private sector employment and 45% of annual turnover in the UK. Big companies and small businesses have difficult relationship not only in England, London especially, but in every other European country. Large corporations are pushing small and local organizations out of business, even sometimes they close, as cannot compete with business Giants.
An interesting fact I have noticed is that very often large corporations need small businesses to succeed and to higher profits. The first reason for such remark is that small businesses create jobs and large companies and corporations need many customers, in fact SME create about 60% of new private sector jobs. They often end up being a major part of Giant’s corporate customer base.
A great number of small businesses start out as an idea, which you have to transform into action. It may be something that you they are really knowledgeable and passionate about. I know that if you think that business can provide something other companies cannot or you deliver it faster and cheaper, you've got an idea and correct direction.
The key to any successful business - is to keep everything simple and costs low: monetary, time. An idea of starting up a business, depending on yourself and being able to develop what you are good at always seemed as a great investment to me. After some research done on how small businesses survive and are developed, I can say that it is worth giving a try.
How long has it been since I’ve dreamed about my own business? Do I have everything to settle in live? Do I have clear goals, what am I passionate about? Am I working toward my goals? Asking these questions helped me to make up my mind and to try myself and my possibilities: you need to stay involved in all aspects of your business ideas and stay focused on what you want your business to be, but you should be flexible meantime. I understand that starting up a business involves following resources: planning, researching, making structural, financial decisions and legal activities.
Like any big goal, you need to break it down into smaller tasks, you’ll be able to handle enough to get started. Preparing a proper business plan is essential for business success and mine consist of:
- company’s description: important information on what we do, where we are located, what markets serve and what differentiates us from the others;
- market analysis: a research of the market, customers, demands, competitors and business industry;
- management: description of company’s structure and organization; how to present the product and how my customers will benefit from it;
- marketing the business: commercial, advertisement and usage of social media to push the product;
-finance decisions: foundation for business, search for financial projects and investments;
I need a viable business plan and not just an idea. After I narrowed my list of ideas down to one, did a search of already existing companies on the market I have chosen, learnt today’s brand leaders and thought of what different can I deliver to the customers, I understood that my business idea is to start up a new vehicle rental business. I believe that opening a rental business is a great decision that should be based on professional advice and information. The peculiarity of my idea is occasion and the location: cars will be rented for different special occasions – weddings, birthdays, hen and graduation parties – the business is unique in its own way. My business plan will consist of a 3-5 years ahead project and will draw the route a company is to take to develop and to grow incomes, company’s profile and goals.
The vehicle rental business has a low level of concentration in London because many firms are small or medium-sized, so that makes it possible for my business to settle on the market. Entry barriers to this industry are temperate, though rather high expenses needed to purchase vehicles. At first I will try to keep my costs as low as possible to form a budget and to realize how much I will be able to spend. As being self-funding I need to be realistic about numbers of the budget, and control expenses per month to find out how long I am to stay in business before turning a profit. My business will be based on one premium - class car, which will serve my audience in East London area. First of all, East London is the most densely populated area. Secondly, it is a historic area, culturally diverse, and the region is not as expensive with lower demands. The East's development is newer, not so many business and a possibility for a start up. My prices will be affordable and will meet consumer needs – one of the most important advantage and a personal strategy. To convince people to try my service, I need to show a high level of service, be flexible and get acquainted with selling techniques. I understand that the leading players in car rental business are those, which are likely increase a range of models that they offer, but the growth of the autopark is planned for the future. After testing my business and getting a feedback, I will try out different prices with different customers to see what Londoners are ready to pay.
Starting a business has its price, so I have already thought of how to cover my costs and what means will I use to fund my startup. I have decided that the form of ownership is to be sole proprietorship, as it means less paperwork and up-front expenses. I will prepare ahead of time search on the costs of paperwork filling to start a business, as it costs money as well. As I am to put most of my own money into my new company, I will need financial assistance: a commercial bank loan or a small business grants. Being a sole proprietor puts me at personal risk, so I am to weigh all benefits and risks, and to decide what is better for short-term and long-term goals. Next I am to register for state and local taxes, to obtain a tax identification number, insurance, business licenses and permits.
Nowadays innovation and creativity are one of the most important skills for attaining success when developing a business. “Revolutionary ideas come about when we doubt our existing view of the world,” (Alan Iny, 2013). Creativity goes hand in hand with innovation, and without innovation there is no creativity. While creativity is a means to produce a unique product, innovation is the introduction of a new idea. Creativity and innovation have always been recognized as a direct way to success. Creative approaches and innovative ideas bring you fresh perspectives and ideas, that is why they should be included as key part of a business plan. When asking myself how creativity and innovation is related to entrepreneurship, I found some answers: creativity is the possibility to reveal new ways of looking at problems and opportunities, while innovation is the possibility to apply creative solutions to those problems.
Every business wants to keep up with its industry's latest trends and stay ahead of its competitors. “Creativity is marked by the ability to create, bring into existence, to invent into a new form, to produce through imaginative skill, to make to bring into existence something new” (Rosel Fonacier and Jens Mueller, 2007) Creative thinking is a driving force and helps people to look at things from a different perspective. It is also a key differentiator in company’s success, as you need to always challenge your current perspectives and explore options around. Creativity is a diverse, complex and unpredictable force in business. The benefits of its are not limited just to new product appearance, as it can improve every aspect of a product’s life, from business model to pricing strategies and marketing. Creative thinking produces great marketing sales that increases brand appeal. “Creativity is not ability to create out of nothing (only God can do that), but the ability to generate new ideas by combining, changing, or reapplying existing ideas. Some creative ideas are astonishing and brilliant, while others are just simple, good practical ideas that no one seems to have thought, of yet” (Harris, 1998).
Innovation on the other hand is “ often also viewed as the application of better solutions that meet new requirements, unarticulated needs, or existing market needs” (Maryville, 1992). In other words it is the process of creating something new. I used to think that massive corporations are homes of innovation, but it usually turns out, and now I can say for sure, that small businesses do it better. In fact, they produce annually more patents than the Giants. Innovative businesses increase productivity, develop new products, improve our lives and stimulate consumption. Every successful business has to participate in future trends and develop a new idea to meet this future demand fast. Innovation will always keep you up front competition when trends and markets shift.
As innovation is not only about designing a new service, but also focuses on existing to improve effectiveness, find new customers, increase opportunities and profits, I understand that I need to propose a unique product. Innovation doesn't always produce something absolutely new. Sometimes innovation makes an existing product better. First of all, I will start my innovation at the low end of the market - with lower pricing for my product, but with high quality of service. The main idea is to be able to provide my clients with any desired requests and wishes. We need to stand out for the right reasons and always be ready to think out of the box.
Another step for opening your own small business and for its further development is The Business Model Canvas – “a strategic management and lean startup template for developing new or documenting existing business models” (Barquet, 2011).
The Business Model Canvas (Osterwalder, 2010)
The Business Model Canvas was proposed by Alexander Osterwalder, where he specifies instructions, which form the building blocks of the business. Building such model as a foundation will enable my business to focus on management and marketing plan, I will also be able to map each of its components. Components of the model that will help me brainstorm the idea of my business are:
key partners:
Who are the key partners and which key resources we acquire from them? Which key activities do partners perform?
key activities:
What key activities value proposition require? What activities are important in customer relationships, revenue stream, distribution channels?
key resources:
What key resources value proposition require? What resources are important in customer relationships, revenue stream, distribution channels?
Customer proposition: What core value is delivered to the customer? Which of our customer’s problems we help to solve? Which customer needs are satisfied?
Customer relationship: What relationship the customer expects you to establish?
Customer segment: Which classes are you creating values for? Who is your most important customer?
Distribution channel: Which channels are better for your business and how much do they cost? How can they be integrated?
Cost structure: What are the most costs in your business? Which key resources are most expensive?
Revenue stream: For what the customers willing to pay? How much does the revenue stream contribute to the overall revenues?
After analyzing every aspect, we are ready to continue our development.
In today's uncertain economic situation, the most important priority for the SME is development, growth and survival. Nowadays watching TV and reading business newspapers, we see how many corporations are struggling and even fail to avoid bankruptcy. That is why knowing how to achieve long-term success is very important today.
Every start up and small business should begin with a critical self-analysis, constant attention at all levels. Small businesses like mine survive not by competing with the Giants, but by filling the market niches larger companies ignore: offer a different service from others and be very patient to your customers.
After developing the idea and getting people acquainted with its advantages, the entrepreneur must continue its growth and not let his share of the market decrease. Much of the important part of a company's success is down to sensing how customers see its services and performance, or you can turn to outside experts - market research companies. Now I can say for sure what almost all successful companies have in common: market, customer and product research and development; marketing and e-marketing, advertising, social and public relations activities; and customer relations. What small businesses must do to grow is to learn some basic skills of marketing, that experts take for granted, to take every opportunity possible to speak to potential customers, ask competitors for an advice, analysis the publicly to identify key target markets and to reduce the waste of important resources. Such an analysis will show the difference between success and failure. Most common reason for failures I need to consider everyday is poor management of the resources available, time and money. I have to gain s great amount of information in such areas as finance, purchasing, selling and managing. To develop yourself together with the business I must regularly study, plan, control and organize: constant study of customer data, market research, new possibilities for the future. I also need to always underestimate how much money is needed for organizing another order, so not to have wrong expectation of incoming revenues from selling the service. It is critical to count up beforehand how much money my business will require: the costs for starting the business and for staying in. Location is also critical to the successful business, that is why East End was chosen by me. When growing your own business I am going to consider following factors: where your customers live, work, are situated; accessibility; location of main competitors; condition and safety contracts; potential problems and their solutions. As it was mentioned at the beginning of the report for me it is critical to have a very detailed business plan. I believe that many small businesses fail because of not paying necessary attention to building up a proper plan. In addition, an interesting fact is that most bankers request a business plan, if you need addition capital for your company. I am planning to focus on slow and steady growth.
Starting out is the most difficult aspect of any business, as there is many challenges of reaching and keeping customers. Marketing a start up is very costly and time consuming, when inspiration and encouragement is needed. When marketing of my business is continuous and targeted, dealing with my start-up will get easier. I do not have the luxury of outsourcing my marketing needs, but I already know many handful marketing practices to keep the challenge of the start-up behind.
Any customer responds to being recognized, especially nowadays in our fast developing world where everybody rushes and the times are “get-the-lowest-price”. My steps to make customers feel special will be seen in the advertisements, in the services provided. 24/7 phone calls will be answered, I will provide not only the vehicle, but will advise with the best plan to make the party special, will be ready to organize needed decorations and order the dream feast.
I understand now that a wonderful startup idea won't do any good if people do not know about it. While word-of-mouth advertising still is very valuable and important, I am to do more than just tell everyone that I am starting a business. Before I start selling my rental service, I will build my brand, company’s website and social media profiles, as it is a must nowadays for any small business. My business will have a professional looking and well-designed page on the internet, website that will help customers easily find out about my services. I am sure that if I don’t have a website, I am most likely to lose my business to those that do. “By using Internet platforms, businesses can create competitive advantage through various means” (Mogos 2015). My goal is to make sure that my website makes me business looks good, not bad. I will create my own unique logo that will help people identify my brand and use social media, as mentioned above, to spread the word. I am going to use such promotional tool as offering coupons and discounts to peoples once they buy the service and on special occasions, also will order so called helpful business cards, that recipients will use — notepads with my contact info on every page or a plate with space to right down client’s phone number when their car is parked improper. Developing an electronic mailing list and sending standard letters to everyone in the region is a great idea to be used, as it may be very effecting and many people are to learn about my company. I will set up a listing for my service start up in search lines, as I know that for example Google and Bing offer a free listing for local businesses. Then I have to pay for the opportunity to be searched on the internet and be at the head of the list, as everyone nowadays is searching everything via internet. My business profile will be on LinkedIn, Facebook, Google Plus and Twitter, and I need to make sure that my page will have a good description, keywords and a link to my website, it will be bright and great discounts will be up front. What is important is to update with interesting content all the advertisements daily, another trick to use is to combine business with pleasure and organize sales: free weddings organization for the first customer or for the 100 one. I should always remember that my goal is not to create a great service, but to help my customer. That is why it is important to adapt everything based on my client’s feedback. Therewith when starting up a business the more people you know, the better. Anyone of the known could be my potential customer, or maybe be a partner in the future, a professional in my field to whom I can reach out to for advice. After searching my potential competitors, I need to network with all of them, who are doing the same type of work. Finally, I cannot let customers simply slip away from me: once in a while, when I do not hear for long from a customer, I am to make a personal phone call, inquiring whether all is well. Looking for something unusual everyday and publicizing it in the local newspaper, magazine, or sending or on the radio, cable TV stations, will help attract audiences to buy what I am selling.
I do not want to be the best, I want to be recognized, and believe that this is a key to success. In a small business like mine I cannot be thrown back from hard decisions and must ensure that I am prepared to do what it takes to deliver great results, no matter what needs to be done. We all know that if the product is “right" for the market, the customers will buy it, but that is not enough, I will give as much attention as possible to their public relations, marketing and advertising strategies like large companies do. It all returns to the issue of self-analysis: if a company has a clear vision of how it wants to develop, the planned way to attack the target is much easier. This allows me with limited resources deliver success. When thinking of the success of any new great business, we should not forget that you - the business owner - are the "secret sause" to your success.
References
Iny Alan, Luc de Brabandere Thinking in New Boxes: A New Paradigm for Business Creativity, 2013. Print.
Fonacier Rosel, Mueller Jens The value of creativity and innovation in entrepreneurship, , Journal of Asia Entrepreneurship and Sustainability, Volume III, 2007. Print.
Harris R. Introduction To Creative Thinking, 1998. Print.
Barquet, Ana Paula B. Business model elements for product-service system." Functional Thinking for Value Creation. Springer Berlin Heidelberg, 2011. Print.
Osterwalder, Pigneur Business Model Canvas: nine business model building blocks, 2010. Print.
Mogoş, R. I. Digital Marketing for Identifying Customers' Preferences -- A Solution for SMEs in Obtaining Competitive Advantages. International Journal Of Economic Practices & Theories, 2015. Print.
Maryville, S Entrepreneurship in the Business Curriculum. Journal of Education for Business. Vol. 68 No. 1, 1992. Print.
