1: Type of Business

My organization which I am starting is a Second hand mobile phone retailer which is sole owned and operated by myself.

1.     Business Type

The business type (legal entity) I have chosen is a sole trader is the simplest form of business organization. There are no legal requirements - you simply set up and get on with trading. Any income or profit that you earn is yours and yours alone and you pay income tax on that income. There are few legal constraints and you have what is called unlimited liability. This means that any debts are your debts and so if you stop trading with large debts, you will be personally responsible for these debts. Creditors will have a claim on your house, yacht or any other personal assets you may have.

2.     Aims and objectives

The overall aim of my firm is to be the market leader of online selling of mobile phones. I think this will be a very tricky aim however with good customer service and perseverance I can achieve this. To achieve this aim I will pursue the following objectives:

·         Turnover will be a key objective to make me market leader as the more the sales I make the more profit I am likely to gain.

·         Profit this one of the most important of my objectives; this will help me with the other objectives succeed. My customer service can be imported through training the employees however without sufficient profit I cannot do so. Therefore the profit needs to made in the worst case scenario breaking even is good for a firm which just to survive.

·         Customer Service - good and efficient customer service I can receive a good strong reputation which can gain me a foothold in the market. Furthermore it can allow me to gain trust and respect from the customers

·         Reputation is primary for my company in this market as it involves the gaining of the trust of the customers. If the company I am starting are giving the customer great services which the can appreciate they will give great word of mouth advertisement to people they come across regarding my firm.

3.     Unique Selling Point –edit

The organisation which I am establishing is a second hand mobile phone retailer, I intend to create a friendly, welcome and comfortable atmosphere which will encourage the customers to purchase from the website. My competition I will have will be from organisations such as UsedPhonesUK and Secondhand-Mobiles, what I have acknowledged from viewing their websites are that the simplicity is not a factor of their website. When a customer searches a website they want to know how to purchase the phone as simple as you can get. Therefore my unique selling point of my phone website will be as simple as phone using numbers and steps to show how easy it is to purchase the mobile phone. Due to my target market is the more working class families and lower class people of the population, I have to promote my product and service using the simplest method for them to comprehend which is unique in comparison to competitors.

4.      How their can establish the Potential demand for their new business.

I will examine the potential demand of my mobile phone firm I will conduct primary and secondary research to analyse the prospective customers I can receive.

5.      How their will balance their personal and business needs.

To balance my personal and business needs I will have to work partially and rest as well to allow a mental break. I cannot work constantly with little rest as this will strain on my body and mind which could lead to breakdown of my firm.

6.      Estimated: potential profitability.

Gross profit = (TSR) Total Sales Revenue – cost of sales

Assume: Total Sales Revenue = £110,000 per year

Cost of sales = 10% of Sales Revenue

Number of customers = TSR / Revenue per sale

Therefore: Gross profit = £110,000 - £60,000 = £50,000

Net profit = Gross profit – Expenses

Assume: Expenses = 50% of Gross profit

Therefore: Net profit = £50,000 - £25,000 = £25,000

7.      Identifiable business trends.

The business trends which I have spotted are the ever changing mobile phone industry which is developing constantly. This current technology includes the 4G which is the fourth generation of mobile phone technology which I have to keep updated with.

8.      PESTLE analysis

·   A political subject which may affect my firm is the Ecological/environmental issues which a new government may implement. Take for example the growing concern for global warming the government may place restrictions on electricity usage.

·         A social factor which may affect my operation is the growth of the unemployment rate. The unemployment rise has left people without jobs and being more careful with their expenses, therefore the consumers may opt for second hand mobiles which I sell.

·         Technology is ever changing in this world especially in the mobile phone market where the industry is constantly evolving. My company will have to acknowledge this change and keep up to date with the change. Current mobile phone generation is at 4G which are charged approximately at £200+ for a new handset. This has opened many opportunities for me as the 3G handsets have depreciated in value therefore my target market are more able to purchase to the lower technical mobile phones.

·         Economic factors which affect my company is the tax increase due to change of political power. The income tax has increased and the nations which are low earners are still affected. The current economic status is that we are recovering from a recession, however the mobile phone market is not affected as mobile phones are considered to be necessity therefore the market is constantly growing.

9.      Personal development self-esteem through a business mentor - picking a mentor from Businesses Startup seminars - linking profile to their answer.

My mentor for this business start-up is James Caan, his expertise and experience I believe can assist me to success.

10.  How a structured business planning would assist their success

Type if Business
Target Market
Legal and physical
Financial Resources
Growth and development
Financial Contingency