Managing communications, knowledge and information
Setting up a business is a very long process that generally costs a sizable amount of money (venture capital). However, with the right plan and good budgeting a business can be a great success with minimal fuss. Although, if all aspects of starting up a business are not covered, issues will begin to rise, causing problems throughout the business. My report will discuss decisions which will need to be made, ways of gathering information, improvements to methods used, stakeholders and more, all adding up to a business opening plan which will cover all areas necessary.
The decisions to be made before setting up a new business ranges from where you are going to sell the product/service, who are you going to aim the product at, how much is it going to cost, etc. For example, if you where aiming to operate in the movie distribution market, you will need to decide whether to sell online or in a store, how much your product cost, who will want to buy it, how can I make it appealing, and how am I going to answer all of these questions? Research. This then needs to be examined to help answer your questions. For example if you obtained information through studying people in competitors stores and found they are more attracted to higher quality goods rather than cheaper goods, you would now to choose quality over quantity. The consumers know what they want, so research into them is vital. As you can see, this process is lengthy and costly but not doing research will cost you more in the long term.
There are multiple sources of information that can be obtained through market research, fly on the wall observations and through companies who supply already complete research into competitors. However, they have their pros and cons, market research for one is the most reliable source of information gathering as an interviewer directly asks potential consumers relevant questions regarding your products, helping answer the main questions mentioned before about, place, price, product and distribution. However, it is very costly so will reduce your budget considerably. On the other hand, obtaining documents (research) from companies is cheaper and a lot less time consuming, however the data can be dated and therefore is an unreliable source.
Although market research seems simple, there are many ways to carry it out which will improve the reliability and validity of the data. For example I would suggest arranging a small store with potential products allowing one person in at a time, allowing them to chose some items and leave. A tally will be made of what items are bought from behind mirror glass that will also allow you to see the customer’s behaviours around certain products. This combined with direct questions will help you understand a potential lay out of your store, most attractive items and least attractive. This allows you to reconsider producing certain products and stock more of the potentially higher demanded ones.
A stakeholder is someone with an interest in a business.
Consumer – the main stakeholder in my opinion as they determine if products sell or not
Shareholder – you and other shareholders will make decisions and objectives will need to be met to keep their investments in your business
Employees – they need to know the business objectives, be treated well and motivated to ensure high productivity
Local community – keeping them happy is essential as they will generally be the people buying your products.
You should contact professionals such as electricians, plumbers and double glazers to let them know your business is opening in case you need them urgently in the near future e.g. glass smashes, you can get an emergency call out so that you don’t need to close your shop during operating hours as this will lose you sales. Stakeholders such as customers will need to be able to communicate their problems or give feedback about their experience with your company and the best way to do so is via email as it is personal;, can be dealt with in your spare time and will not been seen by customers if the feedback is bad, resulting in loss of customers therefore sales.
To build a relationship with the professionals I would visit them to discuss the opening of my business and the potential need for their services in emergency rather than emailing or phoning them as it builds loyalty with them so they can be trusted to be reliable. I would ask my staff to get to know the customers to build a relationship and therefore loyalty that will secure long-term sales. This will be achieved by asking them general questions e.g. how is your day, why are you buying this product, etc, to make the customer more comfortable. In relation to the local community, to build a relationship I will simple keep noise, smell and visual pollution down with potentially sponsoring a local sports team to show our involvement in the area.
As mentioned previously, to help with the decisions regarding location, price and product I would provably focus on my customers, as they’re the deciders of the fate of my business. Obviously with the other shareholders I will find a suitable location for my product, e.g. where it’s demanded, for example England shirts being sold outside Wembley stadium. My customers will provide answers through market research that may be expensive but will ensure long-term operation of my business.
Obviously over time markets change and develop therefore I will employ a reward system within my business for current employees. They will come up with ideas and innovations of products and pitch them to me, the best idea will be produced and if successful will earn the employee a bonus (e.g. 5% of sales profit from the product). This will increase staff motivation and innovations resulting in the business gaining competitiveness therefore increasing market share. Although this is only focused on one set of stakeholders, there’s still great potential.