Management and Planning a Business Venture - Assignment Example

MANAGEMENT AND PLANNING A BUSINESS VENTURE Management and Planning a Business Venture Customer Inserts His/her Name Customer Inserts Grade Course Customer Inserts Tutor’s Name 24, 03, 2012 Table of Content Business description 1 Planning process for Wonder Price Sports Store 2 Human resources in Wonder Price Sports Store 3 Operation management 6 Financial forecast for Wonder Price Sports Store 8 Business details Business name: WONDER PRICE SPORTS STORE Contacts: 2646 LUTON Email: info@wonderpricess.com Business description Wonder Price Sports Store will be a small to medium retail business dealing with sport wares such as jerseys, sport shoes, shorts, cycling outfits, gym equipments, and sports accessories. Sporting activities in Luton have been on the rise recently with a support from various stakeholders, such as Luton Learning and Community Partnership Ltd and Luton Borough Council and Wates. Luton is not only developing as a city but also as a sporting village in which Active Luton have been mandated to mobilise and strengthening the community and schools in the need to live well in health and in fitness. As a result, demand for sports ware has increased tremendously as more people indulge in sporting activities. The nature of this business will be capable of supplying residents of Luton city from a store in one the popular malls. Our products will cover all the demographic groups given that sport is a noble activity for all ages. It will also match with the changing trends in the social and economic trends, as more people are demanding for fashionable outfits to look good when sporting. Fluctuation of prices will be dismal as these sports wares will be required throughout the year as some sports are scheduled in summer whereas others are done in winters. Planning process for Wonder Price Sports Store Business planning becomes a crucial and integral part when venturing into a business. Good decision-making and plans execution can therefore determine the success and the future of the business being ventured. Therefore, it is advisable to use only the strong tools and methods viable as well as good management of the resources available in coming up with a strategic plan for the business (Nunn & McGuire 2010). As commonly known, the major aim of many businesses is to maximise profits whereas minimising the operating and production costs. Therefore, proper planning becomes the platform for the new business venture. A logic model in this case could be the main tool to save the agony of business failure in future through facilitating a logical thinking in the initial stages of a business development. In addition, it simplifies the planning process by analysing the whole business requirements in terms of the inputs and the business outcome. Key issues either likely to contribute to business success are strengthened as early as possible whereas risks may be averted in time to avoid the downfall of the business. Therefore, a logic model would depict the possible outcomes, render any limitation affecting the outcomes, and projecting the desired result that could favour profit maximisation. In addition, logic model will facilitate inputs management at any given business stage especially the planning, implementation, and evaluation. The business owner will focus on enhancing the differences led by business activities to maintain the business viability. An in-depth research on the availability of similar businesses operating from the same mall will also help in minimising the clustering of similar businesses in same geographical region. As a result, a good survey was conducted in Luton to determine the feasibility of this business in the region. Surprisingly, there were many sports wares store in the region and more stores were in the processes of being established. Some of the related businesses were Argos, Nash Range, at Aylesbury, and in Watford among other places. However, the presence of many businesses dealing with sporting goods could not deter establishment of a new sporting business because there is high demand of these good as more people develop interest of healthy sporting and body fitness. The major focus for newly established sporting businesses should be means to win as many customers as possible by creating a customers’ loyalty. One way will be stocking of brands that have been internationally accepted, high standard, comfortable, and fashionable. The price of these goods should not be the major focus because most of the people will be willing to spend more for goods that can offer good services. In United Kingdom, Nike, Rebook, Liz Claiborne, Puma among others have been a hot cake for many fans. Keeping these brands in the store will be a competitive advantage because most people consider sports wares as a prestige and a way to keep informed of the current trends. To start with, the store will be furnished using prestigious shelves and the display units. Recent decorations and attractive nature of the store and the hospitality of the workers will be first priority to build a good reputation from the customers. The stores arrangement will be the most appealing, as customers will be able to move around to shop for various goods with assistance of a store assistance to explain on any matters proving hard for customers. Human resources in Wonder Price Sports Store The nature of Wonder Price Sports Store is a small to medium enterprise, which plans to expand it through other branches, will depend on the initial returns. As a result, the business activities in the business will be minimal in which some workers may be called to serve two roles whenever needs arise. In addition, the business will work under one line of business namely, the sporting goods. However, specialisation in various sectors will be a priority not to be ignored in the setting up of this business. The additional roles will be on voluntary basis and teamwork playing to boost the growth of the business. Most important, all the workers to be employed in this business must fulfil the minimum requirement required in the position of their choice. In addition, the priority will be given to those with added advantages based on the working experience, good record of accomplishment on performance, and previous place of work. Mainly, long working experience could reflect a commitment and dedication to certain line of work. Good record of accomplishment will be a major boost to the establishment and development of the business whereas the previous place of work will define the reputation of business upon the customers. The employees should express abilities in teamwork so that the entire group can establish a strong team to drive development of the business. More so there will be appraisal activities before the employees can completely fit in one of the employment opportunities available in the business (Richbell, Watts & Wardle 2006). The following constitute the human resource to run all the operations of Wonder Price Sports Store. The discussion will reveal the number of employees required in a post, their responsibilities, and qualification they should meet to secure these jobs. i. The production manager This post will require only one person to oversee the availability of the goods in the stores. This will not only mean availability of the goods but also availability of the goods in good time to avoid shortages or surplus. Plans to export or import goods to stores will be under his custody as well as formulating other business strategies geared toward ensuring a steady operation of the business. Any person eying this post must have an advanced technological knowledge, ability to work with diverse people, and an in-depth knowledge on management process. Previous service on similar post will be encouraged to ensure good start up of the business without much consultation and research from other businesses. ii. Operating manager Once the production manager ensures the availability of the good in time, there will creation of utility. However, the presence of goods will require the services of operating manager to ensure good coordination in the activities and transactions within and outside the business. More precisely, the operating manager will be a supervisor to ensure activities are coordinated properly and resources utilised profitably. This post will as well require one person who can fulfil the qualifications discussed below. The organising manager should have sufficient organisational and office skills. A good team player, innovative, supportive, and diligent person could fit in this post. Most important, the person should have knowledge to make wise decisions in time to avoid hitches whenever a problem occurs during the business operations. iii. Office assistant Only one person will be required to take a post that is equally crucial in the business operations. The key responsibilities of the office assistant will be administrative functions, book keeping, and supportive roles. Record keeping is a very relevant role requiring a high experience in making various records at a given time. Therefore, the most qualified person in this post would preferably express office and organisational skills. Financial records are sensitive in describing the business success, stagnation, or failures hence require good accountability for any business transaction. iv. Other employees There will be at least three storekeepers to ensure the arrangements are appealing to the eyes of the customers and giving some directional assistance to customers. The qualifications of these storekeepers will require low skills but high reliability and good communication skills. However, with expansion and opening of other branches in future will require employment of other employees to this business. Currently, these will be the employees to cut down the expenses in salaries and wages as the business will be in the initial stages of development in which there are many expenses. Operation management This is a very crucial component in any business planning because the inputs required for business operation must be put into an account to ensure no misappropriation of funds and inputs at this stage of business development. Resources to establish a business opportunity is always scarce and limited in space and time. Therefore, wise decisions are required to ensure proper allocation of the available resources that could yield increased outputs. If the allocation of the inputs cannot yield more outputs then activities with low opportunity costs should be left out at this stage. Any activity carried out in a business will be based on the profitability and long-term development of business. Budgeting for these requirements in this business will consider only the activities of high priority will be considered first to ensure viability of the business. Any business function hindering the growth and profitability of the business will be eliminated as quickly as possible to ensure regular running of Wonder Price Sports Store. The persons assigned the operation management, and production management will ensure processes of production, business operations, designing and controlling production of sporting goods in Wonder Price Sports Store. A good coordination and teamwork between these two departments will determine the effectiveness of resource use to create customers’ utility. Effective Operation management in Wonder Price Sports Store will ensure all the inputs planned for this business, such as the labour, energy, and material are converted to outputs in which include services and goods offered by this business. It is note that operation management works well when various persons in business bury their difference in ranking and work as a team. Therefore, in Wonder Price Sports Store there will be source of directives to guide the various systems, such as production control, general management, labour relations, and supervision among others. As a result, effective operation management will ensure blending of skills, creativity, and technological knowledge among employees to fuel the success of the business. Financial forecast for Wonder Price Sports Store The initial start up of Wonder Price Sports Store exhibits a small store in which the profit margin will be dismal. However, the growing market segment requiring sporting good in Luton is an encouraging factor to businesses such as Wonder Price Sports Store and any upcoming stores because the demand increase will motivate establishment of such businesses. The operating budget for Wonder Price Sports Store will be much reduced as the expenses are expected to be overwhelming at the start but with time, these expenses will be reduced as some activities and functions are lifetime expenses, for example, furniture. The profits are expected six months after the establishment in which the business will focus on doing sales promotion to market the business and building the business’ image. The accumulated profits by the end of the first year will be saved for the next business year to spear ahead possibilities of business expansion. If possible, the business will have secured enough funds by the second year to open another branch within Luton to get customers from another corner. Among the inputs required in Wonder Price Sports Store, labour and stock are projected to be the hard nut to crack in establishment of the business. Therefore, many funds will be spent in these two inputs. As a result, a short-term loan will be borrowed from bank to meet some expenses. On the other hand, it is encouraging to see the growing market segment in which across demographic groups there is increase of sporting goods by over 20%. This will increase in future as more people are mobilised by Luton Learning and Community Partnership Ltd to indulge in sporting activity for health and body fitness. a. Balance sheet Below is a an example of a balance sheet to Wonder Price Sports Store Wonder Price Sports Store Balance sheet for year ended 31st December 2012 assets Amount (£) Liabilities and owners’ equity cash 6,500 liabilities Amount (£) Accounts receivable 6,000 payable Notes 34,000 Tools and equipment 30,500 Account payable - Total liabilities 34,000 Owners’ equity Capital stock 9,000 Retained earnings - Total owners’ equity 9,000 Total 43,000 Total 43,000 Reference list Nunn, L & McGuire, B 2010, ‘The importance of A good business plan’, Journal of Business & Economics Research, vol. 8, no. 2, pp. 95-105. Richbell, SM., Watts, HD & Wardle, P 2006, ‘Owner-managers and Business planning in the Small Firm’, International Small Business Journal, vol. 24, p. 496 Read More