Detailed report on starting a new business

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John McLaughlin –

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For this item of course work I have been asked to produce a comprehensive study into starting an imaginary business of my choice in the Ballymena district in which I live.  To help me proceed through this I will develop an inclusive action plan which will allow me to see how well I’m progressing through the time that I have been given.  The action plan will also help me with the points that I must cover to ensure this study is comprehensive.

In order for this study to be comprehensive and not lacking in detail or facts I must research all aspects of starting a business.  I will be using books, the internet and contacting similar business to aid me in my research; this type is all classified as desk research, all the results will be quantitative rather than qualitative.  I will also use field research such as questionnaires which is more qualitative.

I propose to start a large electrical superstore retail outlet; I have decided to make my business a LTD, as this lets me have full control and separates my company finances from my own. This wouldn’t be the easiest to initially set up but the benefits will be on going.  I also will have to publish my accounts yearly and will be available to the public to view.


The aim of my business would focus mainly on to competing with other similar businesses in the local area. Undoubtedly my business must at least make a profit, if not then break even.  As with all small independent businesses the overall aim for the first six months is to survive.  Survival and turnover are linked very closely, with good turnover the business will survive like wise if the business’s turnover is poor chances are the business will fail.  Therefore narrowing down my main objective as profit.


To make my coursework inclusive I’ll need to investigate the following objectives:-

  1. Find out the setting up costs required, and how to finance it.
  2. Find out if there is space in the market and demand for another electrical store in Ballymena
  3. To find out how to attract customers to the shop
  4. To find out the lost of the stock
  5. Find out about local competition
  6. Find the best location for the business to be situated

Action plan

This is my action plan; I will use this to monitor my progress through out this course work.

What Do I Want to Find Out

My aims when doing this research are to find out:

  • Find out if there is space in the market for my business
  • What additional services must I offer to attract customers to the shop
  • Find out about local competition
  • Who is my target market

This information will be gathered mainly by primary research; therefore my gathered results will hopefully be more qualitative then quantitative

This will involve going out and carrying out questionnaires, the advantages with questionnaires detailed and customized questions can be found out, also you are gathering information from your target market.

The disadvantages are that it will take time to collect and analyze all the results.  I will also have to spend time on making sure all the questions are well thought out are not misleading.  I will need to sample a reasonable proportion of the local public, therefore giving me a true representation of there views.

I also need to answer the following: -

  • Find out the setting up costs required, and how to finance it.
  • Find the best location for the business to be situated
  • Rules I must abide by
  • Type of organisation I will set up as

This remaining information will be found out from similar local business, books and the internet, this is desk research or secondary research.  This information will be quantitative rather than qualitative which is the only major drawback with this form of research.  This also will be a major factor in helping me achieve my objectives above.

Health & Safety

When I read through the various health and safety leaflets that I have been sent I was surprised about the number of rules I must abide by in order to not receive fines.  The laws I must conform to include:

Health & Safety at Work Act 1974, Section 2

  • Employers have a general duty to ensure the health safety and welfare of their employees at work.
  • The workplace should be ventilated, and fresh clean air should be able to enter. Warm humid air should also be removed by ventilation.
  • The temperature in the workplace should be at least 16ºC.
  • Shelving should be of adequate strength and stability for things to be placed on it.
  • There should be sufficient lighting so people can work and move around safely. Lighting/fittings shouldn’t create a hazard.
  • Sanitary conveniences and washing facilities should be provided. They should be clean, and well ventilated and lit. There should be running hot and cold water, and a means of cleaning and drying. 
  • The workplace furnishings and fittings should be clean, as should surfaces of walls floors and ceilings.


The method I will use is random sampling in the Ballymena area. This is so that I can see what a wide range of people think and want in the local area. This is so that I get data that is relevant to me. I will use primary research, in the form of questionnaires. This is because the primary research will be accurate, and more relevant, as it is being carried out for a specific purpose. The reason that I am using a questionnaire is that it allows gathering very detailed information. The biggest drawback of this is the amount of time.

These results will affect the way my business is operated in a large way.  This will determine what market segments the company will be aiming at.  It will also affect the services and products offered and mainly price and quality.  I will add these results to a database and filter it so I can see all the relevant data needed for me to judge all these factors.

As shown on the page behind this will be the questionnaire that I will be giving out.  I think it contains all the information that I will need in order to filter and process the data.  How I Will Price

My pricing will need to be carefully calculated as this is the most important factor in my business.  If I chose a low price I should get a high price, if I sell at a high price then the laws of supply and demand tell us that fewer will buy.  The price also can indicate the quality of the goods.  A lower price will attract people of a lesser social economic group than a higher price.  If I chose a middle price it would seem I would get the best of both worlds.  

I think from my results that most people want a mid range appliance.  This means that I can attract people from both ends of the social economic groups.  This will be helpful in deciding the location of my business.

I will also need to add a small amount to contribute towards the delivery of the goods and installation.  If I add a small amount on every item, and one in ten require delivery it is possible for the delivery to be paid off by the goods that didn’t require it.

How to price?

This is very important as you must decide how to price your products. There are three main ways of pricing your products:

Cost plus pricing

This is where the company will figure out how much a job costs, and then add on a certain percentage, this is sometimes called a mark up.

Penetration price

This is a company will bring out a new product and sell it very cheap, so that it gets in to market very quickly. When they have established the product in the market they will raise the price.


When you first realise a product in to the market at a higher price then lower the price later. This is because sometimes customers will like the prestige of having your product first, before anyone else. This is called skimming as you skim your customers first selling to the richest.

Pricing Conclusion

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My pricing structure: I plan to use the crucial pricing point, and to sell my goods at a penetrating price on a permanent basis. This is because using the "crucial pricing point" makes my goods seem cheaper, so I will sell more. The reason that I will use penetration pricing is that this should attract customers, destroyer pricing is impractical as I would find it hard to compete with the large companies like Dixon’s, or Currys. To get my promotional price I would add on a certain amount to the price, around 15%.

Field Research Conclusion


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