New business idea
The aim of this assignment is to come up with a new business idea. You do not have actually create the business but you must research the business as if you were going to create the business. For this you will have to have a name for your company, a legal identity, discuss the values and goals of your business, define what your business does, research whether the business is feasible or not, analsyse your competitors, analyse your market, choose a location for your business, how you will finance and market your business.
Part 1: External Analysis
Conduct industry and market feasibility analysis
•Are there any small niches that you can fill that your competitors are currently not meeting?
•Are there any groups of people that are not being served by the customers?
•Do you think that people will buy the product if you are setting up a business that serves the niche market? How do you know this? Are there are any social trends that suggest that people are looking for new products? (example, are people becoming more concerned about health issues? are people interested in social media?)
•Can you make an estimate on projected earnings? How much might a small start up business make in the first year in your industry?
•Will you get feedback for your product/service to help improve the product? How will you collect the feedback?
Analyse the competitiveness of the market using Porter’s 5 forces analysis?
•Who are your competitors?
•Is it easy for new competitors to come into the market? (are there barriers to entry)
•If there are many competitors, is it easy for your competitors to move from them to your business? Are there any contracts that keep potential customers with your competitors?
•Where do you get any supplies from? How many suppliers are there? Are you dependent of some suppliers that are able to push the costs up?
Scan the environment for opportunities and identify potential threats
•Look at SWOT analysis of your various competitors and look for their opportunities. An opportunity for them could also be an opportunity for you.
•Look at the threats to the competitors, a threat to your competitors could be turned into an opportunity for you.
•Look at the weaknesses of the competitors. This can also be something that you can expoloit.
Identify key factors that will determine the success of the business
•Customer service? innovation? responsiveness? team-building?
Part 2: Business Issues
•Legal entity or type of business/ where the business will be located
•Choose your business structure?
Aims and goals of the company
•What business are you in?
•What values does the company believe in? Innovation? integrity? community? Diversity?
•What are the goals and aims of the company?
•What strategy will your company have? will you be focussing on costs? on having a more innovative product?
How is the business going to be financed/ sources of finance
•Debt or equity financing?
•Why are you choosing this sort of finance?
•How easy it is it source this type of finance in the UK at present?
•Where you will find this type of finance?