M1: In this task of assignment I am going to talk about the benefits of starting your own business. I am also going to give an example of someone who started their own business. (Bill Gates)
Now a days, people have chosen to become self-employed because their jobs are not secured. Therefore, there are a lot of advantages of being self-employed such as:
-Be your own boss which means you can make your own decisions without asking anyone but on the other hand, it also brings its own responsibilities and challenges.
-Making money/profit: Having your own business means you can make money by selling your products or providing services. You should put back some of your profit into your business to survive and the rest you can keep it for yourself. It is your decision how to manage your money; it is either use it to expand your business or merge with other company.
-Create your own success which means your business success is in your hand and it is in your decision; you do not have anyone to blame but yourself, So think twice before you decision and also always be prepared to take the risk.
-Gain new experience in life which means being in business society is a good experience because its improve your self-confident to solve problems which can be your strength too.
All of these are just few examples of being self-employed. Therefore, you need to research about your competitors and make a clear plan for your target market such as: which strategies you may need to encourage customers to buy your products.
Starting up in a business is not easy, but it is challenging for everyone; especially for those people who have passion in business.
Bill Gates is one of examples of successful businessmen in the world, he is the CEO of Microsoft (the largest computer software in the world). He is ranked as the world's wealthiest people from 1995 to 2009; except year 2008 which he was third. In year 2011 he was the wealthiest American and the second wealthiest in the world."He didn't have a proper study plan and he also spent plenty of time using the school's facilities such as computers. Bill Gates remained in touch with Paul Allen. Then, the following year they both saw the release of the MITS Altair 88 00 based on the Intel 8080 CPU and both of them saw the chance to start their own computer software company."
Conclusion: Everyone have got opportunity to be successful in life like other successful businessmen/businesswomen, all we need to do is to work hard and be wise.
Distance Selling Act (DSA): this is one of very well-known policy that have been made in business. The main purpose of the Distance Selling Act is to protect customers’ rights and keep their details safe and confidential from shopping online or making a contract from distance supplier. This happens when customers don’t meet personally. (Source)
This policy provide customers the right to..
- Get proper and honest information about the products/goods from the supplier.
- An order cancellation period of 7 working days in which means pull out the contract from the supplier/customer.
- Protection of credit card payment which is to avoid identity fraud.
Employees’ Minimum Wage: this law helps the employees to get the right amount of payments from their employers and it helps all the employers to have ideas on how much do they need to pay their employees depending on their ages, working hours, etc. (Source)
The Current National Minimum Wage Rates
There are currently aged based national minimum wage rates and an apprentice rate, which is always updated every month of October every year. The rates have been applied from 1st October 2012. These are..
-21 years old and above: £6.19 per hour
-18 years old to 20 years old: £4.98 per hour
-Under 18 years old: £3.68 per hour
-Apprentices: £2.65 per hour
A's Fashion Clothing's main target market is people who love clothes especially for those people who have passion in Fashion. (Babies: 0-36 months, Girls: 4-14 y/o, Ladies: 14 and Above).
For market research I will be doing a survey to find out what customers would like/love and if any ideas will work on my business, there would be at least 20 questions in the survey; first 10 questions will be about themselves, and the last 10 questions will be about the business and competitors.
You should do the first Survey before your business launch and should be taken/done every quarterly in the first 2 years of your business and the next survey should only be taken/done when it's necessary for the following years. This may help your business to improve the quality of service and also help you to gain more profits for the business and it is also help me to get more ideas of what customers would like/love and also to know what customers expect from the business.
Promotions Plan:
This is A's Fashion Clothing's marketing strategies for a small business, most of these strategies will work to the public and will help you business to be known in the business world.
- Posters: This will help my business to catch customer's attention.
- Word of Mouth: Nothing will cost my business but it helps me to create customer's relation and trust based on their experience.
- Point of Sales Display: Customers can see the appearance and style of my products (clothes) that I am selling.
- Social Networks (Twitter, Facebook,etc): This is easy to use and it will help my business to promote/advertise my products in public.
- Celebrity Endorsement: It will help my business to establish credibility.
- Pay Per Click (Google):The fastest way to create strong internet presence and get in front of potential customers.
- Loyalty Card: This will help my business to encourage the regular and new customers to always come back to buy my new collection products.
A's Fashion Clothing is a Sole Trade business organisation it is in Secondary and Tertiary Sector; secondary sector because we buy the textiles and turn it into clothes and tertiary sector because your business provide service by selling your products to public.
The first Legal Requirements of being a Sole Trader is to register your business name with Local Business Register to ensure that is not lawful and does not contain certain words and description that are restricted.The Register will advise you if your name contains any such restriction and will either obtain permission from the Secretary of State or else where on your behalf or assist you in choosing an alternative name at no extra charge.
You already have decided on the legal type of the business and what its name will be, either apply online or download a Business Name Application Form and you will post the completed form to this address:
National Business Register
Somerset House
6070 Birmingham Business Park
B37 7BF
Enclosing a cheque (payable to Local Business Register) for your membership and registration fee plus the cost of any other services required. You can also do an online search to see if the name you want is available for use before you complete an application form.
On receipt of my application, The Local Business Register will check that my name is legal (advising where changes are necessary) and search all business and company names databases (plus Trade Marks if requested). Once we are both satisfied that my name can be used and that it does not conflict with an existing name, we will add it to The Local Business Register database and prepare my certificate. This confirms the name that The Local Business Register and you will protect against "passing-off" and, when displayed, it will meet all the display requirements of the Companies Act.
-Legal compliance requirements: tax and VAT Obligations, health and safety.
A Sole Trader is a type of business has legally no separate existence from its owner. The person is therefore fully liable for the debts of the business. Sole traders will usually transact business in their own name.
Although we do not offer this as a service in itself there are a number of ways we can help.
A sole trader is the simplest, non-regulated form of trading where an individual acts solely on his own account; he/she makes all the decisions on business matter and takes all the risks. The main advantage is that the sole trader takes all the profit generated by the business but the disadvantage is that they are also personally liable with HM Revenue and Customs there is little or no paper work involved to start trading.
To register, you need to fill out and complete the Form CWF1 from the HMRC site.
- Income Tax: as a sole trader you will need to submit an annual self assessment form to the Inland Revenue and keep accurate and up-to-date records of all business transactions and accounts. You will also need to pay income tax and National Insurance contribution any on profits. Losses can be offset against tax on other income.
- Tax: You will have registered as "self-employed", you won't automatically be VAT registered.
Financial Issues:
- Borrowing money from family and friends: This is a good way of getting money because you don’t need to pay them straight away. You only need to pay them when you are ready; when you have your money and when you pay them back you don’t pay extra which means no interest. Therefore, the money that you borrowed from your family can also invest in your business if they want to be part of your business and it can be a successful business but on the other hand, they can be very disappointed and they may think that they just threw their money once the business fails.
- Borrowing money from the bank: When you borrow from the bank they ask you a lot of requirements that you may need to present to see if you are able to pay them back when they give you the money. However, you will have to pay the bank monthly and the worst part is paying them back with interest. They will also ask you to give them a copy of your business plan so, they know where or in what will you spend your money. This this is a good thing for some reason because once they grant your request, you have the chance to change your lifestyle and your future.
- Costs greater than profits: Meaning of this is that you can be in debts and you might not be able to cover your next operating cost (for stock and other monthly costs). To ensure that you balance this out you should increase the number of sales and research about your other business competitor and start doing some changes that will help you to improve your business for better.
- Not maintaining accurate financial records: for not maintaining accurate financial records could possible affects your business because of all inaccurate figures; if your business costs aren't calculated properly you may lose money and the risk that you won’t have enough sales to cover up and because of the wrong calculation of profits you won’t able to do your break-even which means, will cause you in trouble.
The financial report/record is very important to see if your business is doing better or not and also to get information about your yearly cost budget.
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