Management Skills and Entrepreneurship

Business Description The business has developed out of the need to create employment for young people in Amman who happen to be gifted in calligraphy. The idea is a personal product that has been in existence since childhood. The following is therefore a description of the business from its inception, structure, and ownership.Advertising We will write a custom essay sample on Management Skills and Entrepreneurship specifically for you for only $16.05 $11/page Learn More The company that is to be established will be under the name H.T, which is derived from the initials of the partnership. The source of the capital is from a local bank in Amman coupled with savings of the partners. The main product of the business will be male jewellery. This decision is based on the market need for this product since business environment in the UK has much of female jewelleries and less of the male jewelleries (Bean 2007, p.17). The available outlets for the jewelleries are also rather expensive and monotonous since the trade is dominated by a handful of companies offering similar products. When established, this business will provide the population with a choice when shopping for jewellery besides creating a sense of satisfaction since each product will be unique. The bulk of shoppers in the UK has also changed with more and more men being involved in shopping and making financial decisions. With the well performing economy, the population will have more money at its disposal. The company to be set up aims to put in place an effective marketing strategy to attract buyers of all ages and ethnicities. Amman was chosen to serve as the headquarters for the business and as a source of labour raw material and resources required (Government in Jordan 1978 p.13) because it provides a good centre for the trade. Amman is known globally for her beautiful handmade ornaments, which have mostly been women’s ornaments (Jordan 1989, p.28). The population i s largely gifted in making the ornaments. This makes the marketing strategy for the capital and the country in general (Skinner 2003, p.15: South 2008, p. 12). Calligraphy is an art that dates back in the country to the Middle Ages as evidenced by the discovery of ancient works of art in the prehistoric sites in the country (Herr 1983, p.45).Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More The works of art have however been marketed in the country alone without exploitation of the international market. The jewellery will be made from different raw materials for start. Clients will be given the choice of selecting the kind of jewellery they want. Traditionally, the jewellery has been made from metals such as gold, silver, and bronze. This decision made the pricing high for the common market. This business enterprise targets to make cheap jewellery for the low income markets in the UK, as wel l as the upper class market thus creating a room for choice between the materials used. The capital required is estimated at a hundred thousand US dollars distributed in terms of equipment, labour, and export price. The three costs represent the largest financial requirements of the company. Buildings The company intends to start the trade by using an old warehouse that has been renovated. The warehouse is big enough to house the offices of the company in one section and the manufacturing area in one part. The floor size is also enough for storage. There are also plans to purchase more offices in some of the office blocks in downtown Amman with other plans being in the advanced stage to acquire a warehouse in the outskirts of London. This will constitute the main buildings owned by the company. The rest will be acquired depending on the demand, market, and quantity produced. Assets The assets that the company intends to acquire and own include tools used for the moulding of the meta llic jewellery, engraving tools, brushes, cameras, protective clothing, land for setting up the business, and a warehouse for storage of the goods waiting to be exported to the UK. The company also intends to acquire a van to transport the products to the airport. With time, more will be acquired to facilitate the movement of the staff and the trade equipment. Some of the other assets that the company intends to acquire include cranes to move the large boxes, forklifts, and advertisement assets.Advertising We will write a custom essay sample on Management Skills and Entrepreneurship specifically for you for only $16.05 $11/page Learn More Goals and Objectives The company has come up with goals and objectives to guide it in the future developments. These have been described as long-term and short term with the time period to be achieved defining the two. In the long-term goals, the company targets to be the leading export company in Jordan dealing with c alligraphy. The other goal includes increasing the net worth to a billion dollar company with branches all over the UK and elsewhere in Europe. The company also targets to be the leader in research and development in the country of Jordan creating employment to a mere thousand people both here and in the UK. The short term goals for the company are those to be achieved within a period of a year. The first short-term goal is to double the gross sales every two months. Secondly, the company targets to double the profit margins within the same period. The sales of jewellery is the third short-term goal. The company targets to make more than a thousand sales within the first two months of its inception in the UK. The fourth short term goal is to control a large market share of the male jewellery within the first year. The last short-term goal involves the introduction of new products into the market with the company targeting to introduce women’s jewellery in the market by the en d of the same year. Philosophy The company’s philosophy is based on the need to create employment for the youth in Amman by providing cheap and quality jewellery for the UK market. The current image of the company is that of a small firm with the desire to expand in the UK. The image the firm intends to create is that of a large company and a market leader in jewellery and supply of ornaments in the UK. The company is focused on achieving its set goals and objectives as governed by the laws formulated by the partners.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Legal structure The business is a partnership with members being drawn from the Capital, Amman, and having the common interest of making money and being self-sufficient. The partners include H.K and T. A from whom the business name is derived. Each member bases the sharing of the profits and other running costs on the contributions. The members however own business in equal proportions. Therefore, the sharing of the profits is on a 50-50 basis. The legal structure is not fixed. However, the company welcomes any likeminded shareholders and partners. The contributions they make will define the proportion of the profits they get after each sale. This will benefit the company by increasing its market share and capital base besides enabling it to expand to other markets. Location The business is to be set up in the outskirts of Amman, with an outlet in the capital of the UK. These locations were selected for several reasons. Amman was selected, as described above for its cost in terms of labour and human resource. The cost of the building, and other things needed to set up the location were relatively cheap compared to the prices elsewhere. The building location is on a lease from the previous owner, and plans are underway to fully process it. The neighbourhood is friendly and sparsely populated. This will provide an adequate environment for business. The floor space will consist mainly of the manufacturing area, and will therefore mostly house the labourers. The transportation facilities in place include pulleys for hauling large boxes, which will contain the raw materials and the completed works. The site also has ample space for parking, which will accommodate the vehicles transporting the Jewellery to the airport. It is also close to the airport. Thus, security in the area is also adequate. There are other businesses in the same location though they are mainly involved in the pottery business. The site is advantageous because the raw materials are just in the n eighbourhood. A smelting plant is located in the vicinity to provide raw materials for the metallic jewellery. The second site in London was chosen because of the strategic position to enable and facilitate in the marketing of the jewellery. This will however be changed with time to the centre of London where there are more customers and distribution outlets for the company products. Production Plan and Quality Control The production plan for the company from delivery of the raw material to the final product is short because most of the products will be handmade thus requiring no sophisticated process. The raw materials will depend on the particular product. For the bracelets, the raw material will mainly be silver and gold with iron being a major component. They will be moulded into shapes and cut using simple tools. Coating the resulting materials will then be made using the desired metals or alloys. The accessories to make them appear beautiful will then be added by the artisans followed by engraving of the ornaments by the use of calligraphy. This process will be followed for most of the jewelleries except for those requiring special processes. Quality control will be assured by ensuring that there is a quality control department in the company for checking the quality of products besides ensuring that only those that meet the set standards make it to the market. The quality assurance in the company will also work in collaboration with the quality assurance departments in both countries involved in the field of the jewellery trade. Management and Organisational Plan The management framework for the company will include the manager, sales representatives, and other key officials in the management. The finance section will have to be manned by one of the members. To begin the company, few numbers of the staff will be involved in management since this will be expensive for the company to maintain. The full time personnel will be the labourers involved in maki ng the jewellery. They will constitute the largest number of employees. Part-time workers will be utilised in the finance section. Personal responsibilities and those of the other partners will involve making the jewellery though this plan will later change to management functions after getting adequate labourers. Business Opportunities The business has a variety of opportunities in the region where it will be opened. The following is a description of the potential customers, the geographical area, and the competition. Potential Customers The population of the UK and London in particular is very large. Thus, it will provide the market needed by the jeweller. The purchasing power of the UK citizens is larger than that of Jordan as presented by the GDPs of both counties (Riley 2002, p.13: Sant 2004, p.76). The market also has a large appetite for handmade jewellery. It therefore suits the perfect consumer group. The choice to market the jewellery for the male sex is based on the theor y that the male sex also has a higher purchasing power compared to its female counterparts in this country. The average male also considers owning a piece of handmade jewellery from Amman to be prestigious and in fashion. Amman’s items and generally those from tm the Middle East are also fast moving here with stocks running out in the few centres offering them. There are varieties of customers in the business having different requirements in the way they prefer their jewellery to appear. Most of the customers prefer golden and silver jewellery. For those who cannot afford them, the company hopes to create gold-coated and silver-coated versions of the ornaments that it will produce. Geographical Area The company targets to conquer the market in London before proceeding to other markets within the UK. These are the long-term goals in the company’s framework. The plan is to establish outlets across London in the shortest time possible. This will involve a lot of strategic planning and re-investment back to the company. Other cities planned for expansion include the financial centres around the country. Business Competitors The business faces stiff competition from other companies in the region providing the market with similar products (Campedelli 2010, p.43). These are more established in the market. Their prices are competitive. To deal with competition, the company intends to lower the running costs by operating from Amman and exporting the jewellery to the UK using cheap cargo flights. Since the innovation uses labourers without the use of machines, the operating costs are set to be lower in relation to those for other companies thus maintaining the lower prices (Duhigg 2012, p.29). The other criteria of dealing with the competition will involve the limitation of the number of administrative employees and establishment of a strong marketing policy (Steingold Bray 2001, p.32). Marketing Strategy As indicated above, due to high competition in the industry, the business will have to adopt an elaborate marketing strategy to ensure success in the market (Marketing handbook 2006, p. 19). The strategy will be implemented in the pricing, costing, sales projection, and marketing plan. In developing the company, a research into the unmet need of handmade male jewellery in the UK preceded. This established that the products offered in the market were monotonous with fewer than ten companies offering handmade products. The market, though not significantly large now, had a chance for expansion with the shares meant to rise (Blythe 2006, p.18). The company has embarked on an ambitious project to open up new markets in the UK by approaching market partners and evaluating the need for mergers and added partners. The market stands to be affected by the invasion of newer products from china, which are selling at a considerably cheaper price based on China’s cheaper technology. This could however be overcome by the use of cheaper raw materials and production of more attractive jewellery with the option of having most of them custom-made to meet the needs of each client. National Economic Trends in the UK The UK’s market is experiencing a growth. This means that more and more men will be able to spend on accessories such as jewellery. This will increase the market to a greater size besides reducing competition (ICC financial survey 1979, p.12). The population is also shifting with the aged in the populace contributing a large number. The economy is also noted to be stabilising after the effect inflicted by the global crisis a few years ago (Book 2009, p.29: McLean Nocera 2010, p.13: Shiller 2008, p.19). Employment rate is also reported to be improving. Thus, more and more people are able to earn a living. The economy of Jordan is also reported to be performing well. The unique characteristic is the high unemployment in the country especially around Amman. This project therefore will exploit the existing economic conditions in both countries to produce a well performing business leader in the male jewellery section. In the year 2011 alone, the British economy improved from the previous years after being facilitated by the increase in the production and manufacturing sectors. The value of imports to this country has risen over the years. Jordan continues to be a major source of imported handmade jewellery to the UK (Amman et al 1996, p.32). The projected growth rate for the Jewellery market in the UK is 2% every year. This is a positive thing for the company (Amman et al 1996, p.32). As it stands, the jewellery market has a total size of over 4.5 billion pounds (Harrison 2010, p.29). This means that the market is performing well and is set to improve. The largest share of the jewellery section is made up of precious metals such as silver and gold. Even in the tough economic times in the UK, the jewellery market is described as growing at a fast rate, which is also encouraging. After precious metals, other categories with recorded growth include watches and costume jewellery (Amman et al 1996, p.32). The marketing plan will be as indicated above. This will involve commercials, adverts, and personalised marketing strategies. Salespeople will also be included in the marketing of the company. Their role will be to sell the company to the large public. There will also be competitions on the streets where the winner walks away with prizes as a way to promote the company. Business Operations The business will operate based on the written-down operations schedule. Each employee will have a designated task in the company. The operations will be organised in the form of the functioning of the company. Operational Function For the business to be operational, an elaborate structure will be provided with the inclusion of all employees and the supporting staff. In the manufacturing area, the personnel will consist of the labourers involved in the making of the jewellery. The y will be housed in the warehouse in the company grounds. Their day will start at 8 am to 5pm. The company will start with a handful of employees before proceeding to employ more in the manufacturing section within the next years. The service to be offered will mainly be the provision of the jewellery. In some special cases, delivery will be made at a fee. The other services to be offered to the clients will be shipping to the desired places. This will however start once the appropriate marketing procedures are in place. To increase the company’s market share, other services to be offered will include the engagement of personal information on the jewellery. The other significant service that the clients will receive includes the provision of accessories that match their taste and fashion. This will be initiated through the marketing strategy that will be set up in the company’s agenda. For the personnel, the company plans to ensure that they are provided with adequate payments to retain them. This will be met through aggressive marketing to ensure that the company has a large profit margin. Housing will be provided to them after the company establishes market control. For those without this provision, the company will embark on the payment of house allowances. Workers will initially work on a contract that will be renewed every six months. Based on the success of the company, most will be retained as permanent employees. The other incentives that the company will use to lure and maintain gifted artisans will be the use of gifts and special payments in the form of commissions for goods sold. This means that each employee will be paid in commission as a percentage of goods sold and made in addition to the regular salary. The employees will also work for five days a week with the weekend and extra hours worked being paid as overtime. A working schedule will also be made for the workers who will be consulted before the timetable is set up. Technology In this section, the technology and application to be used in the company and its operations will be discussed. Since the company will mainly provide handmade materials to market, the technology to be used is simple and readily available. The most important of this will include electric drills and engraving equipment. Since most of the calligraphy will be handmade, electrical appliances will have a limited use thus cutting down power consumption and or saving on the much-needed capital. The other tools to be used include hammers and chisels. They will be used to give the jewellery the required shapes by making the engravings. The other technology to be used include the transport pulleys and forklifts that will be utilised during transportation and packaging of the finished products. Mechanisation will be needed in the packaging of the jewellery, moulding the shapes, and coating the alloys. Electric saws will be utilised during the initial manufacture of jewellery from the raw mater ials to make the metallic frames on which to engrave and attach any added ornaments. The company will also utilise computers and office ware to keep track of finances, processes of manufacturing, as well as distribution. Finances This section covers the financial structure in the company in the present, past, and the expected financial situations. Capitalisation Plan This summarises the financial need of the company including the capital and any added expenses in the running of the business. The main means of raising the required capital in the business is through acquisition of a loan from a local bank here in Amman (Forstater Forstater 2007, p.31). This will fund 95% of the project with the rest of the money coming from the pockets of the partners. A bank loan provides the best opportunity to fund a business (Allman 2006, p.23: Banks 2011, p.13). The bank will be paid in a schedule that will be agreed upon based on the company’s returns and the loan size. The estimated tim e for payment of the loan is projected to be five years when the company is projected to have stabilised to become self-sufficient. The capital gathered will be split between paying labourers, buying raw materials and new equipment, as well as acquiring the new warehouse. To begin with, the company will lease the warehouse and obtain the raw materials from the smelting plant. This will cost around 50,000 dollars with the bulk of it being the raw materials. The rest of the money will cater for the shipping costs, the distribution, as well as the marketing of the products. Personal contribution to the business will be 20,000 dollars from personal savings. The rest of the money will be gotten from partners and the profits made in the first sales. The partners will make the products in the first few months. When the company has established itself, more labourers will be added on to provide their services. The estimated cost of materials is at 20,000 dollars. Advertisements and other mar keting strategies are estimated at 5,000 dollars including offers, sale prices, and payment for the sales officers involved in the process of selling the brand to the male customers in the UK. In the purchase of fixed assets, the building and land on which it stands will be valued with the company willing to spend about 20,000 dollars for the same. This is however not fixed, as the company is still in the process of working out the final price with the original owners of the asset. The money will also be used to purchase the technology to be used in the manufacturing process with the main utility being the electrical equipment. The purchase of the initial gold and silver raw materials will be made using capital from the loan because it serves the biggest proportion of the money being spent. Transport costs and tax levied on the final products to the market will also be included in the loan though this is estimated not to be over 10,000 dollars. The company’s vehicle to be use d to transport the final products to the airport to get raw materials is no included in the budget. Raw materials and jewellery will be transported using the locally available means of public transport. Cabs and rental cars will be used in doing this and in the transport of personnel to and from the airport. In the UK, transport to the outlets will also be via public means. This will continue until the company makes enough money to buy a van and other modes of transporting the jewellery. Security is a major component of capital. Jewellery is expensive and a target for theft. To avoid this, some of the money will go towards hiring guards during the transit of the precious metals and in the transport of the jewels to the final destination in the UK. The purchase of insurance for the company and employees will also be a significant step needed to cover any loss of the raw material, the jewellery, and other assets both in the production and in marketing processes because any loss will b e a setback for the company. The company will also set on a risk-reducing plan by ensuring that the market is evaluated adequately before entry and production of little jewellery to test the market. Contingency plans for the company will also be made should the company fail to make the targeted profits for the first year. This will involve laying off any employed on a contract basis and using the amount of money spared to pay any remaining part of the loan. The table below shows the source and cost of assets. Asset Cost (US$) Source of Funds Raw materials 20,000 Bank loan Pickup truck 6000 Bank loan Packaging machine 12,000 Bank loan Office desk and chair 600 Currently owned Warehouse 30,000 Bank loan Recurrent expenditure for the first year (salaries and overhead costs) 50,000 Bank loan and profits Personal computer 1000 Personal savings Financial Projections (USD) Expected profit in the first year 10, 000 Profit in the second year 50, 000 Profit in the thi rd year 100, 000 References Ali, W Bisharat, S 1989, Contemporary art from the Islamic world, on behalf of the Royal Society of Fine Arts, Amman, Scorpion Pub., London. Allman, B 2006, Banking, MN: Lerner Publications Co., Minneapolis. Amman, H, Kendrick, D, Rust, J, Tesfatsion, L, Judd, K 1996, Handbook of computational economics, Elsevier, Amsterdam. Amman, J 1968, 293 Renaissance woodcuts for artists and illustrators, Dover Publications, New York. Ballantyne, J 1844, Principles of Persian calligraphy, Madden and Co, London. 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Skinner, P 2003, Jordan, Gareth Stevens Pub, Milwaukee, Wis. South, C 2008, Jordan, Marshall Cavendish Benchmark, Tarrytown, NY. Steingold, F Bray, I 2001, Legal guide for starting running a small business, Nolo, Berkeley, Calif. Watkins, D 1999, Jewellery, New Holland, London. This essay on Management Skills and Entrepreneurship was written and submitted by user Miranda Delaney to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.