P1: In this chapter of assignment, I am going to define my personal strengths weaknesses, opportunities and threats.
Strengths (Internal):
-I am an organised person, I always meet my deadlines. I am also cheerful, bubbly and a hardworking person.
-I am good at ICT and Numeracy.
-I have got a job (at the moment, I am working as a F&B assistant in a 4 star hotel).
-I can speak Spanish fluently (It is my first language).
Weaknesses (Internal):
-English is not my first language.
-I am shy (I often socialize with other people).
-I don't have self-confidence (Sometimes, I am not confident to make my own decisions).
Opportunities:
-To go to University to study Business and Administration/Management. (after my 1 year business access course this coming September).
-Get an apprentice to work for another company.
-Get a better part time job and wage .
-Gain more knowledges from my classmates/colleagues from work.
Threats:
-My progression to an access course (I need to get high grades and pass all my exams).
-People are more qualified and have more experience.
-People are more confident.
-Lack of work experience.
P2:I am going to analysis of three different aspects (Regulations and Laws, Marketing and Sales & Financial Issues) that will affect business.
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
Partnership: are two or more people own the company and share the risk, cost, profits and business responsibilities. They have equal rights on making decisions. Therefore, partners are both in the risk once the business fails. (Source)
-Business set-up: Each person who involves in this business partnership needs to sign a partnership agreement/contract and also need to register with the Inland Revenue as self-employed.
-Management and raising finance: The people who are involve in this partnership should invest large amount of money for the business and they should also always be ready to face all the problems that they may have, including financial problems.
-Tax and National Insurance: As partners are self-employed, they will be taxed based on their profit share. Each of them needs to pay fixed-rate Class 2 National Insurance contributions (NICs) and Class 4 NICs.
-Profits: Partners share the money they gained.
Private Limited Company: Control and own by directors and shareholder. If the business fails, they only loose the money they invested and they are not responsible for any debts of the company. The worst part is they can't sell their shares to the public (stock exchange). (Source)
-Business Set-up: Private Limited Company must be legally registered (incorporated) at Companies House.
-Management and Finance: Board of directors or shareholders, depends who is the majority make the management decisions. Finance comes from shareholders, borrowing and retained profits.
*Public Limited Companies raise money by selling shares on the stock market, but private limited companies cannot.
-Profits: Their profits are divided to shareholders.
-Tax and National Insurance: The company pays the corporation tax and must make an annual return to the Inland Revenue.
*Company directors are employees of the company and they should pay Class 1 NI contributions as well as income tax on their salaries.
Payment of Taxes: Any business should go to HM Revenue & Customs (HMRC) to enquire about being self-employed. (Source)
There are two different types of corporation taxes rates that business should pay on time with the right amount. These are:
- Small company business rate of 19% on profits of £0 to £300,000
- Main rate of 30% of profits over £11.5 million
Income Tax: As a sole trader they 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. They will also need to pay income tax and National Insurance contribution any on profits. Losses can be offset against tax on other income.
National Insurance: The contributions are collected by HMRC from employed people and are linked to contributory benefits such as the state pension. There are various classes of contributions payable over a certain earnings which can affect the entitlement to benefits at later stage.
P3: In this task of assignment I am going to identify and talk about marketing and sales.
Marketing and Sales
Online Marketing Campaign: There are a lot of different ways for marketing online such as Social Networks: It is very effective way to advertise your business and your products too because the adverts fee is very cheap and it is tailored and the targeted marketing is very specify this is very effective and efficient to use because it saves your time and money. Joining in social networks doesn't cost you anything; it is free to make your own profile/page.
Adverts in a Major Newspaper: This is another way to advertise the business you may catch a lot of peoples’ attention but on the other hand this kind of advert may cost you a lot of money it may be expensive or not depending the size you want; it should be eye-catching but simple.
How to encourage repeat customer? (Source)
Business can be successful because of repeated sales or repeated customers to make it happens you must be devoted to your customers, making them come to you than other businesses that might offer the same service or products of yours. Make sure you stand out and you offer something more or different to set you apart from your other competitor, it maybe by your great customer service, competitive prices range or quality of your products or service.
You can offer them loyalty card by giving them good discount every time they spend more £75 buying your product or they can also collect points that they can use in the future to get extra discount when they purchase stuff, this might help you to encourage them to keep them coming back and even expand the number of customers with the word of mouth referral.
Make sure to have a good business reputation, so you can attract and encourage customer to buy your products and the most important is that your employees should be also polite, friendly and always willing to help. Gain your customers trust is very important and also make sure you do satisfaction survey/check to all the customers to make sure that they are happy with your products or service and if they have any problem don’t get scared, be polite and try to be friendly and ask them if is it everything alright or what/how can you help them?
What I would do if sales were low?
If the business sales are low, there’s might be something going wrong with the products/goods or services. Business may need some changes on advertising or new different marketing strategy.
At the moment, I am going to research every detail that can possible affects the business. I am also going to research about my competitors in that way I can get ideas on how to improve the products/sells or services that I provide. I think I should try online marketing, because now a days a lot of people do online shopping, I can also do some offers such us 30% discount on selected items or buy 1 get 1 half price. Therefore, the most important thing is I will try to reduce my costs as possible as I can.
P4: In this task of assignment I am going to describe the financial issues that can affect preparation for the business.
-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.
P5: In this unit of assignment I am going to analyze my business via SWOT (Strengths Weaknesses Opportunities and Threats) Analysis
SWOT Analysis and Critical Success Factors:
•I have passion in fashion (clothing).
•I have enough money to open a new business.
•Another strength of my business would be if my factory manufacture and produce good quality clothing this may satisfy customers and there would be a chance that they will tell others about my products and this will help my business to get more customers and this might be the start to get a good reputation/image of my own business.
Weaknesses (Internal):
•I don't have any experience running a business.
•Time: It will takes time to finish and produce all my products.
•High rent, when I pay high rent the less chance I gain profits.
•Another weakness of my business is when I decided to expand and when my business starts getting bigger, is the harder to maintain quality control. The more of each product I produce, there will be some clothing that is damaged through the process of production and if it gets in the hands of a customer they might complain and spread the word that the quality of my clothes are not that great as they expect.
Opportunities (External):
•I might do Products offers (student discounts, buy one get one 1/2 price).
•Another business opportunity is that my business may get a chance to network with other business people and get the chance to expand the business to other places/countries it could be nationwide or worldwide.
Threats (External):
•Competitions with other brands this include the prices of my products, it should be the right price of each clothes to encourage people to buy my clothes.
•Location: I have to be careful and think wisely where to open my business. I must choose the place where the population is big and the rent is low.
•Legal changes make it hard for me to open a new business.
•Business Failure: I may be bankrupt and ends up losing all my savings.
P6: I will be describing the sources of advice when starting a business. These are:
-Solicitor/Lawyer
-Accountant
-B.I.S (Department for Business Innovation and Skills)
-C.A.B (Citizen Advice Bureau)
-Local Authority
-Mentor
-Family
I will also be explaining who they are? What they do? and How can they help me in starting a new business?
-Solicitor/Lawyer: is the person who gives you advice about legal matters in setting up your business. The business process should be proper and legal because this helps your business to avoid crises. A solicitor/lawyer can also help you to identify the possible problems and helps you to take actions to prevent them- protecting your business from risk and saving your money.
The solicitor/lawyer can help you about the company structure of your business by explaining all the different options and advise which the best one for your business and also a solicitor/can also set up the option you have choosen and when it comes about choosing your business premises a solicitor can help you to apply for your business license and also help you to fully understand the terms of the lease such as: increasing the rent, service charges, restrictions.
Therefore, a solicitor/lawyer is very important in business society because if someone sues you and your business, a solicitor/lawyer will help you find solutions to solve the problems or complaints.
-Accountant: an accountant is the right person to ask for help when it comes to money matters because a good accountant will help you to avoid paying unneccesary tax. She/He knows all the allowances and legitimate expenses and will make sure that you can claim all the money back. An accountant gives me advices about tax.
You should talk to an accountant before you open a new business because it is not good waiting for a long time (a year later) to discover tips that would have saved your money.
An accountant can give you advice whether or not you are better off to launch as a limited company or to operate as a sole trader. They will also advise on partnership issues and should generally steer you in the right direction.
-Family: Setting up a new business with my family advice gives you self-confidence of what you are doing because of their support. It also helps you a lot because it would be easy and convinient for you to get ideas on how to encourage customers/clients. It also presents unique challenges over and above the usual problems a startup phases.
Family advice is very useful because you can use them to help the next generation to survive their business.
-Local Authority: The local authority can led you money and gives you low interest rates to encourage you to set up your own business by helping you and your business to learn what kind of services you may need to use and know about. These include collecting business rates and approving planning applications, enforcing health and safety, environment and trading standards requirements and issuing parking permits.
-Mentor: A mentor is the person who provides advice base on her/his experience and expertees on how to survive and prosper your business in business society.
A mentor can help you on how you should run your business properly by giving ideas and advices and she/he also helps you to make decisions for your business to be successful and not to fail.
-B.I.S (Department for Business Innovation and Skills): is the department who gives you ideas about the economic growth by investing in skills and education to advertise/promote trade and bosst innovation and they can also help you and other people to start and grow a business. They also protect all the consumers and reduce the impact of regulation.
B.I.S can help you to gain new skills that you may need to compete the global employment market. They can help you to research about the business industry , which is very important to help economic growth of your business. They also provide you a lot of information about the consumer law, which is you can get ideas how to use the consumers/customers right.
The most important about B.I.S is that they can help you to get better regulation by reducing the amount of regulation and they can also help your business about the businesses cut time, save money and to be more efficient.
-C.A.B (Citizen Advice Bureau): is the department who can help you to resolve your financial issues such as debts, benefits, employment, and housing. They can also help you to resolve your emotional problem such us being descriminated against by somebody else.
You can get advice from CAB by phoning them or face to face.
"As a conclusion, I would use both individual and organisational (formal and informal) advice for starting up my business.
The first step I would do is to go to consult a solicitor/lawyer to get information about all legal matters and legal processes in business and then, I am going to consult an accountant to get information about money matters which is can help me to avoid paying unneccesary tax and get some ideas how on to manage the money.
After consulting a solicitor/lawyer and an accountant, I am going to a mentor who has got the same business as me and has got an excellent experience of running a business to ask for help, advice and train me on how to be a succesful businesswoman. Secondly, I am going to ask my family, relatives and friends about their opinions, ideas and advises in running a business.
Therefore, I would also go to consult other organisation such as: BIS, CAB and Local Authority because these organisations can give me the right advice with all the bases of my business including terms and regulations, financial issues, location for my business and more."
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.
Customer's Benefits:
-Save Time: Customers don’t have to go to the shop, they can just relax at home and go to the company's website where they can make order and within 3-5 working days it will get delivered in their house. This is very convenient for everyone especially for all disabled customers because they do not need to carry heavy shopping bags. All they need to do is to make order through online and wait.
-Able to order anytime: Online shopping are available 24/7 which means you can make orders anytime and anywhere. You do not need to wait in a long queue and waste your time. All you need to do is choose your things that you want to buy and when you checked out you all you need to do is enter your card details and it is done.
-Different type of payment methods: Customers can choose different type of payment methods they can choose paying through Credit/Debit Cards, Payslips, Paypal, etc. It is also keep your details safe and confidential especially when you register at online website.
-Discounts: Online websites offer massive discounts. It can be much cheaper buying things online instead of in store products.
Businesses' Benefits:
Having your own website is very convenient for you and for your business because it has 24/7 presence for customers; they can still check and order something anytime from your website. It is also very helpful and useful because you can control all the contents of your products such as changing the prices, adding new products, etc.
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