Individual Creating A Business Opportunity Essay

Question:

Discuss About The Individual Creating Such A Business Opportunity?

Answer:

Introduction

Entrepreneurship is a process through which an individual can design, launch and run a new business. The individual creating such a business opportunity is called as an entrepreneur. The term typically focuses on the launching and running a business. Running a business involves lot of risk in an initial stage. For gaining market competency, it is important for a business enterprise to be aware about the booming industry. This will allow the business to grow in a multi-dimensional way. The following proposal reviews the fast-food business future prospect in Australia (Drucker, 2014). It further distributes the sustainable objectives that are important for a business organization in dealing with the issue. An individual can gain sustainable objectives by developing concrete goals. It is important to form an effective alliance by gaining competitive advantage. This will allow the business organization to gain a competitive advantage by understanding the market requirement. The restaurant industry in Australia is doing extremely well. They can only gain a competitive advantage by understanding the market requirements and functioning accordingly (Kirzner, 2015). The business organization needs to enter into the marketing by understanding the growing business prospect. It is widely recommended that the business organization need to deploy effectiveness through an effective framework. It will allow the business to manage the future challenges and gain appropriateness. In a long run, it is important for a business organization to develop effectiveness through different business techniques. It is advantageous for the business in gaining a competitive advantage (Kuratko, 2016).

Brief description of the industry and market

In the recent time, the Consumer health awareness has transformed the Fast Food Services industry. The overall Industry demand has been affected by augmented awareness about the nutritional content of fast food. People are turning towards the healthy options due to increased awareness. Industry operators have countered by bringing in a range of healthier, premium choices with less fat, sugar and salt. The change in consumer fondness has led to an invasion of new operators contributing higher quality fast-food options. The overall participation in the fast food industry has gone up combining with rising prices as demand for premium products has increased. It is expected that the drive for revenue growth will increase by 3.0% over 2016-17. The Revenue is predicted to increase by an annualised 3.9%. Fast Food Services industry is presently at the mature phase of its life cycle. The forecasted post annualised growth is expected to be 2.3% over the 10 years through 2021-22, while comparing it with an annualised rise in Australian GDP of 2.5%. There is a slight deficit of the wider economy over the 10-year period. There is a continuous demand for the healthy food options; however the overall deficit has been determined by weaker revenue development and strong opposition from external sources. There is a serious competition in the industry from supermarkets, restaurants and convenience stores (IBIS WORLD 2017).

Following are the products provided by the entrepreneur in the fast food industry:

  • Burgers
  • Pizza
  • Chicken-based fast food
  • Sandwiches, salads and juices
  • Desserts and confectionery
  • Other fast food

Type or Entrepreneurship

The type of Entrepreneurship depends upon many factors like availability of fund, and deriving the capabilities according to the type of venture an individual is making. Independent, Family, Corporate and Franchise are the four type of entrepreneurial venture in today’s business context. In order to make a successful growth, it is necessary for a business organization to develop concrete objectives that will help him in adding sustainable growth and development. In the current context, it is important for a business organization to develop a business venture through an effective procedure. This will allow the organization in managing the business in an effective way. The success of a venture resides on number of factors like human, financial and material resources. These factors accompany in making an effective business organization. . Independent business organization is the one who takes all the decision in the organization pertaining to the business. All the major decisions are taken by the entity (Schaper, Volery, Weber and Gibson, 2014). The corporation is a business organization established to gain effectiveness. It is a form of business operation that states that the business is a separate, legal entity directed by a group of people known as board of directors. A Family business is the one carried out by the people in a family from years. The business is carried forward by the future generation. This allow in gaining sustainable objectives and attaining longevity (Baum, Frese and Baron, 2014). Franchising is a business which provides right to use a firm's business model and brand for an agreed time-period. It is one of the finest models for the fast food restaurant industry. There are international food-chains that can easily be established through an effective franchising model. The model helps in integrating the function in the most effective way. Majority of fast-food chains are based on the franchising model. This model is effective in gaining market potential and to deliberately gain concrete market objectives. Depending upon the current market opportunity and growth, it is important for the business enterprise to develop an effective entrepreneurial venture in order to manage the business (Bhachu, 2017).

Benefits and drawbacks of each of the four options Independent, Family, Corporate and Franchise

Business Venture

Benefits

Drawback

Independent

  • The sole proprietor takes all the major decision related to the business.
  • There is no external intervention to the business.
  • All the decision regarding the sale or transfer takes place at the judgment of the business-man.
  • No corporation tax payments
  • Negligible legal costs to establish a business organization (Scott, 2006).
  • Fewer business requirements
  • The individual is held personally liable for the debts and obligation of the business. The risk pertaining to the business extends to him individually
  • All responsibilities and business decisions depend upon the individual.
  • There are fewer investors in the business organization (Szirmai, Naud? and Goedhuys, 2011).

Corporation

  • Shareholders are not liable for any debts or for the decision handed down against the corporation.
  • The Shareholders are responsible to the extent of their equity in the corporation.
  • More funds can be raised by selling shares in the corporation.
  • They may deduct extra benefits it provides to employees and officers.
  • In order to form a corporation, more time and money is required than any other business structure.
  • The government agencies monitor corporations on a regular basis.
  • The Corporate profits are liable to higher overall taxes as the government taxes profits at the corporate level. In addition, a corporation might not presume any dividends paid to the shareholders (ACS and Audretsch, 2005).

Family

  • Stability: The Family business are more stable and typically determines the business is known for the longevity in leadership, resulting in constancy within the organization
  • Commitment: The business organization meets all the pre-requisites that make the business more committed and accountable (Wu and Huarng, 2015).
  • Flexibility: The business is flexible enough to meet the expectations of an individual. An individual can work in his own way.
  • Long-term Outlook: The business runs for a longer time-period in order to meet goals.
  • Decreased Cost: The family members work at their will and contribute their finances to guarantee long?term success of the organization (Tidd and Bessant, 2015).
  • Family Conflict: there can be a Conflict in between the members resulting in disturbances. This may affect the family relationships, and the type of disapproval that comes with familiarity.
  • Unstructured Governance: There are disturbance in the organization due to Governance issues such as internal hierarchies and rules.
  • The business organization takes an inability to follow and adhere to external corporate laws that tend to be taken less seriously at family businesses.
  • This affect the business against the trust inherent at family firms
  • Nepotism: Some of the family businesses are unenthusiastic to let outsiders into the top tier,
  • This affect the business organization and result in balancing skills, education, or experience
  • Succession Planning: In the absence of a succession plan it is difficult for the business organization to gain effective leadership.
  • The family business might fail due to unavailability of a succession plan. It is important for a business organization to put-forward a plan in order to gain success. It is important to manage the business organization.

Franchising

  • It is one of the most effective way through which an international business organization enter into the market. This reduces the risk of business failure. The business is already based on the proven idea that decreases the futuristic loss.
  • Products and services are already established in market. Consequently there is no need to do market testing.
  • A recognized brand name and trade mark will benefit the business organization through advertising or promotion.
  • The franchisor supports the business that includes training, help setting up the business etc.
  • No prior experience is required to operate the franchise.
  • In this way the small business can compete with big businesses, due to the pool of support from the franchisor.
  • One can enjoy the exchange rights in their territory. The franchisor won't trade any other franchises in the same location.
  • Financing the business is easier. The financial institutions are more expected to lend money to buy a franchise.
  • One can get benefit from communicating and sharing ideas and receiving support the network.
  • Relationships with suppliers can easily be established in this business structure.
  • The cost may be higher than expected. The initial cost of buying a franchising is higher that is difficult for an individual to manage.
  • The franchise agreement includes restrictions that might affect an easy flow of business.
  • The franchisor continuously overview the business due to his intrusive nature.
  • The franchisor goes out of business (Hagen, Denicolai and Zucchella, 2014).
  • Other franchisees may affect the brand reputation.
  • It is difficult to sell franchise and can sell it to someone accepted by the franchisor.
  • All profits are usually shared with the franchisor.
  • The rigid nature of a franchise restricts capability to develop changes to the business.
  • This will help me in managing the business in the most appropriate way by developing the business.

Benefits and drawbacks of buying an existing business compared to starting one from scratch

In order to start a business organization it is important to manage the operations in case of organizing a business. It is tough for an individual too start a business from scratch. For that purpose it is necessary to collect the resources and to execute the plan accordingly. If an individual wants to establish a new business he has to make sure that he has enough resources. It is important, for managing a business enterprise it is evident to arrange the resources in the most appropriate way (Link, 2017).

The business organization strengths and weakness depend upon the utilization of the different factors. While starting a business from a scratch it, is tough to deploy all the resources in an effective way. People might find difficulty in managing the resources from scratch. They have to invest time on every peculiar object in the organization. This creates a mess for an individual who is planning to invest in the business for the future prospect. It is important for an individual to meet the future contingencies all alone. This will create problem for an individual to proceed with in a better way (Mitra, 2013).

In case of an established business it is easy for an individual to move forward. The resources are available easily leading to easiness in conducting a business. For a business organization it is important to manage the resources in an appropriate way, any scarcity of resources can lead to business failure.

For the restaurant business it is recommended to buy a new business from a scratch. This will help in adding creative idea into the business organization. In this way the business can gain a competitive advantage over other. By developing effective changes into the business, it is easy to gain economies of scale. The purpose of a business organization is to meet the objectives by deriving long term goals. A business organization can only survive, if it has added some competitive advantage to their business. The new venture should manage the business by adding creative idea that stimulates the business process. This will be helpful for a business organization in order to derive goals (Lee, Hallak and Sardeshmukh, 2016).

Recommendations

Hence, it is important for an individual to implement an effective business model tool. This tool will help in growth of the business. Effectiveness in a business can only be derived if the business has as vision. It is recommended to enter through a franchisee. This allows the business organization to grow in a diversified way and to use resources in a better way. The change in consumer fondness has led to an invasion of new operators contributing higher quality fast-food options. The overall participation in the fast food industry has gone up combining with rising prices as demand for premium products has increased. This is creating an overall impact on the business process. In order to manage the business in a better way, it is recommended to manage the resources for the purpose of franchising. This process allows an individual to develop a business enterprise in a well organized way. Depending upon the current market opportunity and growth, it is important for the business enterprise to develop an effective entrepreneurial venture in order to manage the business. This is important for a business to develop the resources in an effective way. The purpose should be to gain a profit in order to remain competitive in the market. The purpose of the business organization is to manage the changes and to be a pioneer. Franchising model helps in integrating the function in the most effective way. Majority of fast-food chains are based on the franchising model. This model is effective in gaining market potential and to deliberately gain concrete market objectives.

Conclusion

To Conclude, It is evident for a business organization to derive the policies keeping in mind the growing necessity. The structure of the business should be focused on growth and development. One can attain the concrete objectives by deriving effectiveness at work. It is important to manage the ongoing challenges and to gain competitiveness. An individual can gain sustainable objectives by developing concrete goals. It is important to form an effective alliance by gaining competitive advantage. This will allow the business organization to gain a competitive advantage by understanding the market requirement. For a business enterprise it is necessary to choose a better model.

References

Acs, Z.J. and Audretsch, D.B., 2005. Entrepreneurship, innovation and technological change. Foundations and Trends® in Entrepreneurship, 1(4), pp.149-195.

Baum, J.R., Frese, M. and Baron, R.A. eds., 2014. The psychology of entrepreneurship. Psychology Press.

Bhachu, P. ed., 2017. Immigration and entrepreneurship: culture, capital, and ethnic networks. Routledge.

Drucker, P., 2014. Innovation and entrepreneurship. Routledge.

Hagen, B., Denicolai, S. and Zucchella, A., 2014. International entrepreneurship at the crossroads between innovation and internationalization. Journal of International Entrepreneurship, 12(2), pp.111-114.

IBIS WORLD 2017, Fast Food Services in Australia. Online. Availabe at: Accessed on: 10 September 2017

Kirzner, I.M., 2015. Competition and entrepreneurship. University of Chicago press.

Kuratko, D.F., 2016. Entrepreneurship: Theory, process, and practice. Cengage Learning.

Lee, C., Hallak, R. and Sardeshmukh, S.R., 2016. Innovation, entrepreneurship, and restaurant performance: a higher-order structural model. Tourism Management, 53, pp.215-228.

Link, A.N., 2017. Ideation, entrepreneurship, and innovation. Small Business Economics, 48(2), pp.279-285.

Mitra, J., 2013. Entrepreneurship, innovation and regional development: an introduction. Routledge.

Schaper, M.T., Volery, T., Weber, P.C. and Gibson, B., 2014. Entrepreneurship and small business.

Scott, A.J., 2006. Entrepreneurship, innovation and industrial development: geography and the creative field revisited. Small business economics, 26(1), pp.1-24.

Szirmai, A., Naud?, W. and Goedhuys, M. eds., 2011. Entrepreneurship, innovation, and economic development. Oxford University Press.

Tidd, J. and Bessant, J., 2015. Innovation and entrepreneurship (No. 3). Wiley.

Wu, C.W. and Huarng, K.H., 2015. Global entrepreneurship and innovation in management

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