My next question is one of the main questions that I need to know in order to complete the products to have in my store, I am told whether or not people buy snow hardware and by looking at my graphs I think it would be an excellent idea if I was to sell products of this kind. Followed on from question three, question four then tells me what products people buy and each one of the products has a high percentage and therefore I would stock each thing to cater for peoples needs. Skis, snowboards and clothes are the largest most highest selling product that people buy so from this I would stock a lot of different types and ranges of products from different brands and different companies.
Question five is just a general question to find out a bit more about the people that I am interviewing and to ask if they like watching snow sports and as you can see there is a huge 90% of people who do watch snow sports and therefore I could sell videos in my store as more people like to watch ski-ing and snowboarding and could benefit a lot from me selling them.
For my questionnaire I need to know what products I should sell, so for question six I conducted a question to ask just exactly people what people would like me to sell and what they wanted, so from this I was told everything that I needed to get the best out of my business. For what I need to sell the main products for everyone’s satisfactory are snowblades, skis, snowboards, clothes and accessories. In order for my store to do well I think that I should stock a large range of these products for everyone to buy and to custom everyone’s needs. I think that I would sell a lot of these products as there is no winter sports shops in Chester-le-street and my questionnaire tells me that a lot of people would like to buy the products and are interested in these sports.
Although there is not much need to ask this question I feel that it was a need to know thing as it helped me to find out about whether or not people saw the point in me having build a snow shop, if more people said that I should not build a snow shop then it would be pointless and a waste of money on my behalf.
In order for me to specifically know what products people would like to buy and the range of products I should sell I carried out a question which asked people if they would rather my shop concentrated on hardware, such as skis or snowboards etc or for it to concentrate more on videos and more commercial products. The majority of people that I surveyed would rather that I sold hardware and not commercial products, I think this is because the uses of skis and other more physical products and more widely used and attract people a lot more.
I asked people where they live and where else they travel to buy there products so I know how far away the competition is to me being situated in Chester-le-street, if more people lived in Chester-le-street and close to here then I can assume that 90% of the people would rather come to my shop to buy products as oppose to travelling to Newcastle or Durham to shop, if I happened to not have a certain product that someone would like to buy I would have the service to order it in especially for them so that they would get what they wanted.
The majority of businesses are owned by sole proprietors. The owner has complete control of the business, and is completely responsible for the company success or failure. The risks of sole proprietors are highly immense, but the rewards are great in job satisfaction.
The main advantages of this form of business are:
Small start up costs. It is simple for me and very inexpensive to get set up as a sole proprietor. However I will have to tell the income tax authorities and I will be taxed under schedule D. I must also keep proper business accounts. All profits would be kept by me, the owner of the company, although I must save enough money to be able to pay tax, interest charges on loans and VAT.
If losses were made in the first year may be offset, or balanced, against tax paid earlier in the same financial year. The small business is very flexible, where if one kind of activity is not making any profit I could easily and quickly switch to something else, like if snowboarding was only a winter sport I could then sell roller blades or all terrain boards during the summer.
The main disadvantages are:
Unlimited liability. This means that I would be completely responsible for all the debts of my business. It is difficult to raise money capital, though government schemes have made it a bit easier. The firms growth is often slow as being only one person can do only a limited amount of work. The risks of failure are high as there is usually great competition. The business stops would stop with my death.
The law states that in an ordinary partnership there can be between two and twenty partners in a partnership. Partners are the joint owners of a business and work together to make the business run better and make more profits.
The main advantages for partnerships are:
They are very easy to set up. Profits belong to the partners, who usually work in the business. The affairs of the partnership can be kept private. Partnerships are small and most of the time with good relations between the partners. Two people have more chance to make a profit than one. Extra capital for the business. Two people can normally raise more money than one.
The main disadvantages are:
Working together can cause disagreement. Me and my partner could provide different amounts of capital. Profits may be shared unevenly. Ne may not sure on who should control the business.
The next thing to do in a business is to form a private limited company, (this gives the company the right to add abbreviation Ltd to its name). The share holders own the company and are usually family members of the persons who set up the business. Some of the shares my also be owned by friends, employees and business associates.
The main advantages are:
I would be the founder of the business, I would usually be the main shareholder and director of the firm. I would have started the business and I would have a say in everything that happens. If the company was in debt the main shareholders would not have to pay out of their own money. If they invested £1000 in shares they may lose that but not a penny more. I would have Limited liability.
The main disadvantages are:
For me it would be more expensive to start up then a sole trader. A big company’s accounts must be audited, (I must employ and auditor and an accountant). My company must hold an annual general meeting (AGM).My company would be less flexible in some ways than a sole trader.
A public limited company (plc) is in its own way different from a private limited company as its shares can be bought and sold by the public. To become a plc a firm must have a minimum of £50,000 share capital, the money invested in its shares. Most plc’s have a much bigger share capital totalling millions of pounds.
Share prices:
The shares can be bought and sold through a bank or a firm which deals in shares. My current price would be quoted on the stock exchange. The nominal, or original, price of the share when it was issued by the company may be £1. However, the price of the shares will rise or fall according to how well or how badly my company would be performing.
Control of plc’s:
The majority of shares in practically all companies are owned by institutional investors. Their huge blocks of shares give them great influence over companies, policies and the way in which they are run. The institutions votes at company annual general meetings (AGMs).
Franchising is a form of co-operation, often between a big firm and a sole proprietor. The firm has a product known by people with its own name, such as macdonalds and in return for an initial fee and continuing royalty payments, the franchiser allows the franchisee to set up his or her own business and to use the firm’s own name.
Advantages:
Franchisee’s have many advantages and have a much greater chance of success than smaller businesses as the product has to be tested and has a secure place in the market.
Disadvantages:
I would have less independence than other sole traders. I will not be able to sell the business without the franchisers agreement. I would not always have the right to renew the franchise automatically. I would have to make continually royalty payments to the franchiser. I would sometimes have to pay a mark-up, or percentage of the price, on supplies from the franchiser.
For my business shop I will need to decide on a type of ownership I will be for my business and for it to hopefully be as most successful as it can possibly be. I have looked at each type of ownership and each of there advantages and disadvantages, therefore I have concluded to be a sole trader as I think that this would be the best type of ownership for me to expand easily and sell my products with that in mind of me making money. Also more of the advantages that I would have is that I am able to make all of the decisions and to be able to keep all of the profits and go away whenever I like, such as away on holiday without having to worry what anybody else would be doing to my company. Although I have unlimited liability and there could always be the chance of me going bust and losing everything, I feel that this would not happen as my questionnaire shows how much people are interested in my shop. As my business is only going to be small I do not feel that it has to be expanded too quickly but in time I could then go into a partnership with maybe someone of my close friends who knows a lot about the shop or maybe someone such as my father who could just be a silent partner and keep quiet but invest money into the business.
I decided not to be a franchise as I do not always make the choices and I am not allowed to use my own name so therefore I would not be individual instead I would have to use the name of a chain of shops and business. In order for me to make sure everything goes the way that I wanted I could not have been in a partnership as I would not be able to make all the choices and therefore not be able to have everything go the way that I wanted and market my products to my demands. I also decided not to be a public limited company as I would not collect all of the profits, also because there is a control of policies and that the majority of shares in practically all companies are owned by institutional investors. Their huge blocks of shares give them great influence over companies, policies and the way in which they are run.
In order for me to be a private limited company I would have to take a loan out from the bank and it would be a lot more expensive for me to set up my business, as a cause of this if the company didn’t have very good business I would not be able to pay off my debt to the bank.
When looking at my cash flow you can see that for my first month (January) I have taken out a two thousand pound loan to pay for my fixtures and fittings, in order for me to pay this back I would have to make a profit at the end of the year of over two thousand pounds, of which I have done. If my sales were to differ and maybe go down then I would not be able to pay off the debt and would then have to sell a few goods in order for me to pay, or I could lower wages but could result in staff walking away from my shop. All of my sales are just estimated and if I was not to make these sales then I could not be able to pay for things such as water and gas bills so I should therefore have an overdraft if I was to go over the limit of my expenditure.
During the middle of the year is when it is my quiet time as this is not the season for ski-ing and snowboarding and also main mountain sports. During this time I would have to watch what I spend on stock and what I would spend as I may not be able to sell it. My less profitable time of the year is easily made up by the winter season as this is when the snow is falling and the mountain sports are back in action therefore I am selling a lot more and making more profit.
290 divided by 28 = 10.36
10. 36 is how many customers I would have to have into my shop every day just to be able to break even without making a loss or a profit. My fixed costs stay constant throughout the year as these are just things I am paying for at the same amount every month. I can see that in my break even graph in order for me to make a profit I would have to have over 290 customers every month.
The promotion of my shop is one of my main elements when trying to get my shop known to the public, one of the main things that I can use for promotion is advertising, though sales promotions also play a big part. Advertising is a big business, but it is expensive, there would be a number of ways advertisement is used, but I could use many ways in trying to persuade people to buy some goods or service from my shop.
When promoting my shop it is very important to choose the right branch of the media, I would have to consider a few factors when choosing my media, I would have to take into consideration, the message I am wanting to put across, how expensive it would be, the market segment a business wants to contact and whether the likely customers are local, regional, national and international.
Sales promotion can boost the sales of my products at my shop. In the long term it could be increased by efficient marketing and sales planning. and this is hopefully what I am going to achieve because this is going to get my shop off the ground and known to the general public. The different methods in which I could use sales promotions could be; money off, discount vouchers, better value offers, free gifts, competitions and PR promotions.
I would have to look at communication and that Businesses need to communicate with their customers. Promotion is about: making customers aware that the product is for sale telling or explaining to them what the product is, making customers aware of how the product will serve their needs, persuading them to buy it for the first time or again. It is the most direct form of communication in the marketing mix.
When promoting my business I would have to consider media advertising and the different ways of media advertising there is, these are television, radio and cinema, magazines, national and local newspapers, trade newspapers and journals, directories, posters and transport.
Advertising agencies are businesses which specialise in organising the advertising of other businesses. Within the advertising agency, an account executive will be appointed to run a particular campaign. Direct mail involves a business sending advertising leaflets directly to a household or business through the post. To keep costs down, the advertiser needs a list of potential customers. For instance, it may target households in a particular area, getting names and addresses from the electoral register. Packaging is important for a product like Brunswick. It needs to be instantly recognisable so that shoppers don’t buy another brand by mistake or, worse still, not recognise the product in the shop. The colour of the packaging and its design need to reflect the image of the product. It also needs to give any information required by the rules.
I feel the most practical and affordable places for me to advertise my shop would to be on the radio and in local newspapers, such as the evening chronicle, I think these would be a good way of getting my shop well known to the public, when I have the money I feel I may advertise my shop in the yellow pages as this is where most people look for shop and goods where they can go out and buy the products that they want.
There are many different methods that I could choose to help the promotion of my business, these would help to get my business started and for people to know about it. The different methods I could use are:-
For my business I would be able to send mail or text messages to certain people who I may think would be interested in the sports and things that I would be selling. I could look in the electoral register and the census taken every ten years to help me target the more wealthier people and family’s with children who may be more interested in mountain sports.
I would be able to target a huge audience and have a large impact on people into the sight of my business and what they would be able to buy. If I was to have a TV ad then it would be life like therefore attracting more people because they can relate to it. The problem with TV ads is that it is expensive and it is more difficult to target than with press.
I think that the press would be a very good method of telling my people about my business. It is easy targeting certain people or market segments. I do not think that this would be a very good method of promotion as ads are often unread.
The radio is relatively easy to target people and a lot of people listen to it at home and in their cars while travelling, it is of low cost so I would be able to afford it, but it is only for a small audience. I think that this would be a very good method of promotion and people would soon know about my shop.
I have concluded that I am going to use both I small percentage of direct mail and target a small amount of people and I am going to use the radio as this would target a very large audience and would easily get my shop well known and promote it well.
The location of my winter sports shop is a very important and an essential part of my business, it helps to attract people and is better if it is in a nice area. When deciding on the location of my shop I will have to consider the following factors:
- Transport links.
- Nearness to markets.
- Work force.
- Local environment.
- Grants.
Transport links: I will have to get goods to my shop, therefore I will have to consider on the ways I will be getting them there, I could get them delivered by road to make it quicker and easier to get a hold of the goods. If I was to be trading with distant countries I would need easy access to ports and airports.
Nearness to markets: taking into consideration the type of material that I would be using it could depend on how close or far I would need to be to my supplier. If I was going to use raw, bulky and heavy materials it would be easier for me to be close to my supplier. For the population around my shop area I would have to choose a location that would be convenient to my customers.
Work force: I would have to know how people are getting on and what kind of qualifications they would need, for example: I would need a hard working group of people to be working in my shop and be able to work for the salary that I would be paying them.
Local environment: where I place my shop has to be convenient to my customers and make them want to come and be welcomed, if the place is pleasant and has good stock supply and products it would attract more people easier. If there was entertainment around the area where my shop would be it would attract more people to the area and then that could lead to more customers.
Location 1
This is my first location that I have been looking at, I decided that this would be a good shop to own for my mountain sports shop as it is of a good size although it goes a bit too far back and it would be difficult for me to fill it all with products. The location of this shop is in a very good position of the front street as it is halfway from the top and bottom of the street, in this case people will have to pass my shop to get to the places that they would want to go, depending on where they want to walk to.
Location 2
I do not think that this would be a very good location for my shop as it is at the top of the front street out of the way of everything, although it has shops next to it that attract customers I doubt that these would attract people who would like to buy any products in my shop. A good thing about this shop is that it would be a cheap location for my business.
Location 3
I think this is one of my best locations as it is in the middle of the front street and to be able to get to any of the other shops you have to pass it, therefore no one would not be able to see my shop, it is near by local good shops that people know and go into and this would help to attract customers to my shop. I feel there is one disadvantage of this location that would hold me back and stop me from having my shop here, this is that there is not enough space in the shop for me to stock all the products that I would like to and store in my shop.
location 4
I do not think that this would be a very good property for my shop as it is in the middle of everything and rent rates would be a lot more and unaffordable for me to run, although it is a good size and in a good location I do not think I would benefit from having my shop at this location.
I have concluded that I am choosing my first location as I feel this is the most suitable and appropriate for the size of my shop and location, I would be able to stock all of my products and is easily attracted by people in the front street as it is close by other shops and is in the middle of the street so you have to pass it to get to anywhere at the top or bottom of the front street.
I chose not to have my shop at location two as it is at the top of the front street out of the way of everything and is only a small shop for my business, therefore I would not be able to stock everything that I want and would disappoint my customers.
Location three, although being in a very good location and near by good shops it was too small and I would not be able to hold many products up on display, this could result in my shop not selling because I would not have a very large range of goods for my customers, causing me to eventually become bankrupt.
My final location was not a very good place for me to set up my shop as it would be too expensive for me to rent and buy, although it is a good size I felt that my first location was better.
My business would have to borrow money for varying lengths of time. Some of that money would be needed for long term expenses such as permanent assets for machinery or land. I might also require money for more short term periods such as paying rent or wages for my staff. This also may be needed for if I was buying a small vehicle or office equipment.
Bank overdrafts would be a very good way of me being able to buy equipment or small goods that I may require as this is a very cheap way of borrowing and allowing me to pay back the money that I would have borrowed without it collecting too much interest. Factoring is another way of me obtaining short-term finance for my shop as I could sell my debt to a larger firm who are also in debt and I would not lose any money as I would not have to employ to earn the money back.
Long term finance would commonly be needed for a variety of purposes, including buying property for larger shops, more like a large chain of stores where they are able to pay there debt back for longer periods of time, such as 20 years.
In my evaluation I will be talking about all the things that I have concluded and all of the decisions that I have made, I will say why I chose these and how I thought they would be better for my business.
The first thing I had to find out was whether or not there was a demand for my shop and when I was finding this data out I took into account that there is always new houses being built and more people choosing to move into Chester-le-street therefore I assumed that there would more and more people shopping in Chester-le-street and there would be more of a chance of anyone being interested in my products. I felt that if there was more people living in the town of Chester-le-street then I would get more business and earn more income.
The second task I took on was to find whether or not people are interested in any of the sports and to find out if they would buy products at my shop, when looking at my questionnaire or graphs you can clearly see that people would be interested in what I would sell.
I then had to decide on what ownership would be best for my shop and location which would help to attract more customers, I chose the best ownership that I felt would be good for me and help me to keep my business running whilst earning more income and my location was chose on where it would be in the front street and what it is near, how much the rent would be and how big the shop was to stock my products.