Paper Example on Challenges That the Business Owners Could Face

Abstract

The failure or success of a new venture depends on addressing various challenges it encounters. Such obstacles include proper training, adequate financial backing and appropriate guidance. Research shows that several factors affect the growth of a businesses. They include personalities of the people involved in the growth, their motivation for coming up with the plan, the obstacles they encounter during the process, the support they get as well as the financial or economic problems they experience. Further studies indicate that the growth of the organization identifies what the owner of the business require, the challenges they experience and the approaches they take to handle such obstacles. The findings suggest that problems in finance, inefficient supply of change management and recruitment are the key challenges to a business growth. Additionally, small and micro-enterprises are sometimes unable to build their potential because they are deprived of the factors that influence their success in business.

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Introduction

Businesses perform significant roles in the country's economy. According to Ahlstrom (2010), businesses create employment, economic wealth, and promote innovation. Yet, in Britain, high influx of enterprises has not been interpreted as the result of the growth of small businesses. This is shocking because small ventures have many benefits over large organizations. Bravo-Biosca, et al., (2016) argue that small businesses have shorter communication lines that help them to divert attention on well-defined goals. In essence, being small provides a chance to respond to new opportunities. Studies show that small ventures accounts for approximately 99% of all ventures in Britain. They are the key sources of new employment in this nation. Several factors determine the growth or decline of the existing businesses. They include personalities of the people involved in the growth, their motivation for coming up with the plan, the obstacles they encounter during the process, the support they get as well as the financial or economic problems they experience (Carpenter & Petersen, 2002). Creating and growing a business is an activity that comes with risks and achievements, and many ventures often fail within the first year of their formation. Study conducted by Carree & Thurik (2010) has mirrored possible influences on the new business success. Such influences include the impact of the growth of the new venture, innovation and customers. Potential new entrepreneurs may lack the knowledge of establishing or running a new enterprise when they apprehend their ideas (Christensen & Raynor, 2013). In this report, the challenges that the business owners could face in expanding their firms as well as the possible solutions to the challenges will be identified.

Objectives and Methodology

The primary objective of this report is to analyze the growth of a small business in Britain, the challenges that may affect the expansion of the firm, and the possible solutions to the obstacles using various business strategies. The methodology used is the exploratory research that employs qualitative methods. The qualitative approach is used in this report to give a clear analysis on how a small business can grow into a bigger enterprise.

Findings

How to make use of one million Pounds to set up a departmental StoreA departmental store is a large retail shop that stocks various types of products in different departments. Setting up a departmental store requires a lot of capital to start and operate the firm. The intended set up store will stock clothes for both males and females. In this case, to ensure successful operation of the business, it will be important to utilize the inherited one million pounds effectively. As the owner, it will be wise to divide this money into different portions. The first portion will be used to boost the establishment of the store. The other portion will be used to stock the products whereas another portion will be used to support operating activities such as advertisement.

Since departmental store is expected to be located in the city, it will be effective to use part of the money to choose a good site with high population. This will ensure that the store draw nourishment from the town. The other thing is to add stock to the store using the money. The products will include different clothes for both men and women. Most importantly, it will be imperative to purchase designed clothes for men, women and children.

The other use of the money will be to employ highly competent individuals: - marketers, sales representatives, supervisors, cashiers, and sales associates who will guarantee smooth operation of the firm. Such individuals will ensure that the organization offers quality services to the customers.

The money will also be used to create a website that will enhance advertisement. Developing the firm's website will give it an absolute control over its activities, and also helps in strengthening its brand image. Operating and promoting online stores using the website will require large amount of invested capital. Part of the inherited one million pounds will be used for this purpose.

Benefits of Creating a Department Store

A department store in the fashion business represents a large retail firm that offers consumers with different kinds of goods and services (Davis & Shaver, 2012). In this case, it provides different types of clothes to both men and women. Therefore, the customers will be guaranteed quality products and have the advantage of selecting the clothes they need.

Another benefit that the intended fashion department store will experience is that it will give the consumers the direct experience of the clothes by touching, feeling and judging their quality. By doing so, the customers will be attracted to the products and can purchase them instantly.

Another benefit is that the department store will allow online shopping. As a large fashion store, the firm will probably attract many consumers around Britain. To accommodate all its customers, it will create a website where it advertises its products and allow the consumers to purchase them via online means. This move will save the traveling expenses of the customers and their time.

Additionally, the customer is saved from moving around to different places to collect their desired items because most of their needs will be found in the departmental sore. Another advantage is that the store will operate for longer hours compared to retail shops. Another advantage is that the store offers huge trade discounts because it focuses on huge purchases. Posing huge discounts attracts large volume of sales.

Challenges of Creating a Department Store

The main challenge of creating a department store is the location. Department stores are normally established in concrete and inflexible places. In other words, departmental stores are in the cities; therefore, customers living far from the town cannot enjoy the benefits of the store.

The other challenge is that the cost of operating the business is high because it sometimes offers free services to the consumers. Similarly, the cost of publicity and advertisement are high (DeTienne, 2010). In some instances, the fluctuation of costs of products adversely affects the firm's operation because departmental stores often go for bulk purchases.

Besides, customers may not be given personal attention due to the size of the business. The departmental owners can also fail to make an individual contact with the customers. In this case, the sales may be controlled by employees who may not consider customer satisfaction.

Challenges Faced in 5 Years and Possible Solutions

Financial Difficulties

Lack of enough funds may affect the growth of the business for five years. Even though the department store may develop and give birth to retail outlets of various styles and sizes, it may still have a long way to go before it catches up with the international standards (DeTienne, et al., 2015). Being a growing business, it may lack capital to compete to the international level. Financial constraint also results in problems related to advertising costs and pricing of the products (Dosi, et al., 2010). Therefore, more investments will be required to boost the operation of the business as the best solution to this problem.

Investing its development will attract more customers, help the firm to open its departments in different countries, employ more individuals, and build positive relationships between different international retail companies (Fielden, et al., 2000). Another solution to the financial problem is obtaining government grants and applying for business loans in banks and other financial organizations. Being that the firm has track records in business, it has a high chance of securing loans from financial organizations.

Time

The other challenge that is likely to occur is time. In essence, with growth of the business, it is possible that the owner will not have adequate time to do everything required by a running business. Consequently, they may neglect the administrative roles to focus on the needs of the customers as the business grows (Galindo & Mendez-Picazo, 2013). The solution to this obstacle is to employ different administrators and posting them in separate departments to give the owner full concentration to the business.

Inefficient Supply of Chain Management

The growth of the business may also be affected by inefficient supply of chain management. This may be influenced by unorganized sector that dominates the organization (George & Bock, 2011). The absence of supply chain management may result in low inventory cost which can affect the consumers, thus affecting the cost of the goods. In the process, the store may be forced to sell its products at lower prices contrary to its objective (Gielnik, et al., 2012). Solution to this problem is that the management must focus on improving the supply chain management regularly to save the business from collapsing.

Delayed LogisticsAs a large store, the business will be involved in constant supply of products to and from the market. The lack of proper logistics in other parts of the country may affect the distribution process for the next five years. This issue could be a major obstacle particularly for retailers because ine...