Customers And The Business example essay topic

When an owner is interested in going into business they must consider first whether they would want to start up a new business from scratch or by purchasing a business. Some business may be inherited, restarted form a previous business failure or bought by employees from the owners. Though the most common option is setting up a new business from scratch, which approximately 70% of businesses start. According to the case study, petal works have considered to establish their business from scratch. In setting up a business from scratch the owner is able to set it up exactly as desired and are able to determine the pace of growth and change. On the other hand there are disadvantages, which the owner may have had to consider, as there is a need to build up a customer base, employ workers and develop lines with suppliers.

Some other disadvantages are that it is uncertain whether the business will be successful or not as there is no business reputation. Secondly, a business must consider the location. It is crucial for the businesses success as they must chose the best location. Some factors, which are concerned, are proximity to customers, proximity to suppliers, proximity to services, visibility and cost. As petal works is a retail business they must consider the location vital to its survival.

Factors such as the proximity to customers are necessary, as it needs to be near customer base to gain profits and also a customer base. Petal networks must be visible to attract customers going by as to gain a reputation if it has just started to operate. This business may rely on passing customer traffic as it is a retail store though its also has advantages where they can reach their customers also by technology. Thirdly, a business must consider the capital. Capital is the total assets or wealth of a business, both fixed and working. It is necessary for a business to have income to either start up a business or either to continue one.

Equipment, stock and other expenses are needed to be paid off. Before the business may open they must ask themselves two questions. How much money will I need to commence operation and where will get it from? To solve these questions a business owner must need to estimate the amount of money, which will be needed to start the business. Costs such as equipment, stock, legal fees, lease fees. Then they must estimate how much it will be to run and operate the business.

Costs such as wage, advertisement, insurance, interest, accountant fees and so forth. Next, there are two ways of receiving capital. Either form debt finance or equity finance. Debt finance is where money is obtained through loans either long term, short term or medium term. Equity finance is where money is gained from sales of shares of ownership in the business, or from the owners or partner's savings.

As petal network started off their business, debt financing is required, and due to this borrowed capital interest is what is needed to pay off for borrowing the money. Debt finance may be form institutions such as banks, finance companies etc. Followed by this, petals network must consider they type of legal requirements. The registration the name must be made according to the new south Wales business names act 1962.

Local governments also impose regulations as to where they may place their business, as to ensure activities that to not belong together are segregated. The local governments place these zone regulations. Local governments also impose health regulations and there are standard which need to be met to achieve a license to operate. The trade practices act 1974 is a law that protects both customers and the business so that they are not deceived or mislead by products and to regulate the trade practices of businesses. The supply network is important to any business, as without it, it will affect the business prime function.

The supply network is the source of raw materials and or finished goods, which are crucial to any business. The establishment of a supply network is concerned with reliability, quality and transportation mode. In conclusion, to operate a successful business from the establishment phase to the post maturity phase an owner must consider the key considerations before setting up a business. Without knowledge on these factors the business will eventually lead to cessation.