The key personal features needed Essay Example for Free

The key personal features needed EssayCASE STUDYLaurie and Joe ask to open up a hairdressing salon. They nonplus had precedent experience running and managing a shop and now they want to run their own product line line. Write a report discussing the key personal features needed, suitable geological formation options for Laurie and Joe and finance options they should take into account.Keypersonal featuresTo ensure success when establishing a concern, laurie and joe need fall in the three key personal qualities entrepreneurship, personal qualities (motivation, experience, expectation) and other influences (cultural background, gender). EntrepreneurshipAs an entrepreneur, the basic qualities required ar to beAssertive, Determined, Very organised and responsible, Willing to take risks, Good with people, A good leader, Motivated, Dedicated, Confident, Realistic, Healthy, ResilientLaurie and joe must have a desire to succeed and have drive and energy which relates to the per sonal qualities of a person. A person wanting to establish their own business needs to have motivation, experience and expectation.Personal QualititiesMotivationMotivation refers to your personal drive, determination and desire to achieve a goal or objective, in this case setting up a business. There ar several reasons for why people break up up their own business but it is usually due toHaving independence and creation your own bossChoosing the stead and fel starting time employeesGaining more control over own destiny and increasing personal wealthHaving something to leave to familyAccepting a challengeSecurityExperienceAn experienced person would haveKnowledge of the product and service being enteredSkills in management such as communication, ER, history and finance, marketing and operationsOrganizational and customer service skills.It would be best if Laurie and Joe satisfied these requirements in order to have the best chance at a successful business.ExpectationExpectation relates to the persons level of ambition and self confidence. Someone with high expectations will have a vision for the future(a) of the business. Some expectations that Laurie and Joe should have includeFinancial rewardsIndependenceSuccessRole as the bossSecurity of future employmentOpportunity to use skills other(a) influencesOther influences include cultural background and gender. For laurie and joe, cultural background would not be a big factor for the success of their business as they want to open a hairdressing business. With gender, Laurie and Joe would just have to consider if they will be open to both genders and if customers would allow the opposite gender cut their hair. adapted establishment optionsBefore setting up their own business, laurie and joe must choose one of three establishment options start outing from scratch, buying an vivacious business or buying a franchise. There are advantages and disadvantages for all three options so Laurie and Joe must pick the one most suitable for a hairdressing business. beginning from ScratchStarting a business from scratch usually only occurs whenA new product is being introduced on to the marketExisting businesses arent meeting customer needsThere is a large demand and the market is growing.If these circumstances dont exist, it would be more uncontrollable to start from scratch. However as Laurie wouldnt be providing a new product, only the last two circumstances would need to be considered. Although it can be difficult to start a business from scratch, there are some advantagesThe owner has the freedom to set up the business the way they wishIf funds are limited you can start on a small scaleThere is no goodwill to wear forThe owner can determine the exploitation of the businessThe owner can choose the locationHowever, as noted above, there are some disadvantages when starting from scratch such as metre is needed to develop a customer base, employ staff and develop lines of credit from suppliersP rofit levels could be low at start up and the business could have liquidity problemsThere is a high risk of failure and a measure of uncertaintyFinances could be hard to obtainAs Laurie and Joe want to establish a hairdressing business, it is recommended that they choose to start from scratch as it would be most suited for their needs. purchasing an vivacious businessAn existing business may be purchased instead of starting from scratch as it may already be a successful business and would have an set up customer base, employees, equipment and location. Although there are a few advantages, there are also disadvantages when it comes to buying an existing business.AdvantagesSales to existing customers will bring in automatic incomeThe inventory and supply networks are set upEquipment is available for immediate useEmployees could be a good source of advicePrevious business owner could provide training and adviceIf the business had been successful it could be easier to obtain financesD isadvantagesSome employees may resent any changes to the business operationThe existing business could have had a poor reputation within the communityThe value of the goodwill could make the business over legal injurydAssets could be old and overvaluedThe location cant be changed and the existing layout may be difficult to changeFor Laurie and Joe, buying an existing business would be the most suitable.Buying a franchiseA franchise is license by a parent company to an individual to operate the parent companys business on their behalf. The franchises make up a chain of businesses under the parent companies name. a franchisor is the large organization and a franchisee is the individual(s) that operates the business on behalf of the company.Finance OptionsLaurie and Joe have two options when it comes to how to finance the establishment of the business. The two options are owners equity and debt finance.Critical issues in business success and failureWhen Laurie and Joe first start their business, there are five critical issues to be aware of. They areHaving a business planIdentifying and sustaining private-enterprise(a) advantageUsing applied scienceAvoiding overextension of financeManaging cash flowWhile most small business fail in the first couple of years, careful attention to these critical issues will servicing the business to succeed.Having a business planA business plan is the blueprint for future growth and development within a business. It sets out the coveted goals and strategies to direct the business. A business plan is essential to long-term success and must be followed. It should also be modified when there are changes inTechnologyThe competitionThe economyThe customers needsWhen setting up a business plan, Laurie and Joe would need to consider the prime function of the business, the guardianship statement, plans and strategies and budgeting. Laurie and Joe should also include why they want to establish the business, the goals they wish to achie ve, the steps necessary to achieve their goals and the time frame in which the steps and goals should be achieved.Identifying and sustaining competitive advantageSustainable competitive advantage refers to the ability of a business to develop strategies that will ensure it has an edge over its competitors for a long intent of time. To have a sustainable competitive advantage Laurie and Joe would need to think about pricing (higher or lower than competitors, prestige pricing), feel, value (a good price for the quality of product/service) and the features of their product or service. Laurie and Joe would be best off charging the same price as competitors but provide a better quality service and hair products. Laurie and Joe could also think about using the differentiation strategy in which they would offer customers something that is not already offered by competitors.Use of technologyTechnology is having many effects on businesses and the advancements and changing technology are al lowing business to advertise and communicate to customers in more convenient ways. As Laurie and Joe are setting up a hairdressing business, technology wouldnt be a big factor. A hairdressing business wouldnt rely on internet applications such as e-commerce and most likely wouldnt even have a website. The only technologies a hairdressing business would require are EFTPOS machines so that customers dont have to pay cash which therefore widens the customer base.Avoiding overextension of financing and other resourcesOverextension of financing and other resources refers to when business owners go over the budget and spending money on resources which are usually financed by external sources such as banks. To avoid overextension of financing and other resources, Laurie and Joe need to pay close attention to gearing, equipment/furniture/stock and budget.Gearing refers to the proportion of debt and equity finance that a business uses to finance its activities. If a business is highly geare d then there is a high level of debt resulting in a greater risk. Therefore it would be best for Laurie and Joes business to have low gearing, so more equity than debt.