Critical Evaluation

Introduction

Embarking upon this Enterprise course, my initial vision was for my business partner and I to start up our own wedding planning business.

Our key focus was to accommodate small creative businesses and newly graduated students. This was to be achieved by co-ordinating weddings through personal communication with customers to discuss their individual wishes and then supplying them a portfolio of our resourced partner businesses; browsing their speciality skills/ styles in order to accurately supply their demands.

Viability of the venture was determined through Market research, analysing competition; then formulating and project a business model and its various developments through:

·         Secondary research: statistical data, costs, and analysis of the industry.

·         Market research within the wedding industry to find a possible gap in the market.

·         Consumer surveys to identify gaps that need to be developed and to fully maximise those target markets.

·         Existing competitors’ research.

·         Approaching and interviewing small businesses to identify levels of interest.

·         Financial research to produce a model that would communicate our initial investments and then forecast an overview of income through a 2 year business plan to predict the sustainability of our idea.

·         Drawing up a relationships and blueprint model to review the different branches within our business where we would establish partnerships and contracts.

At first the idea felt quite exciting, engaging with the different research that I would need to undertake in order better ground this business idea .The prospect was enormous and somewhat intimidating but I knew I had to determine whether this was just a hobby or potential career. One of the main drives for committing to the project was to understand any areas that initially overlooked and therefore discover any weaknesses in my approach.

Initially, I had some reservations around critical areas of the project as listed below:

1. A big concern was that my business partner and I, though trained in our own creative fields, knew little to nothing about this expansive industry and the intense competition we would be facing. As both my business partner and I are not married we could not draw upon our own personal experiences and see the business through the eyes of our consumers.
2. The second and probably biggest concern that I also encountered mid-way into this module was the risk around the financial investment required to launch the company which were not only high but in most cases unmitigated.
3. The competition is fierce and massive within this field and as we are just two university graduates we have absolutely no contacts sourced or any business to cater for and therefore we present no real advantage to potential business partners in affiliating with us at present.

These 3 concerns made me re-evaluate our circumstances but I decided to continue my research within the Wedding field to ascertain what potential this proposal could have.

Through reading the NESTA textbooks, the first stage was to create a list of personal values to establish our motives behind this venture and to test these against a SWOT analysis model to identify a sufficient market that would support it.

After analysing financial models coupled with industry statistics, I concluded that this business proposition was not viable. The skills and experience required for the venture, together with the lack of demand for wedding planners, proved potential risks and possible detrimental damage to myself financially, emotionally and to my business reputation within the industry.

Through analysing competition and market forces I identified that I needed to target a niche in the market for a specific or untapped product.

I was influenced by Maslow’s hierarchy of needs and the importance of these categories being factored into the development of business models.

Looking back to my business values chart I selected the three I felt were most important;

·         Financial awareness

·         Community care

·         Eco-awareness

These became the foundation for my new venture.

Before deciding on my next idea I created a target market survey, which I targeted specifically at married or engaged couples so that I was able to gauge my consumers’, needs from both perspectives i.e. expectations from pre-married couples and lessons learnt from post-married couples.

I simulated the various scenarios in which my customer would require my services and from this I was able to generate a specification for the content of my deliverable.

The most popular responses from within the survey presented: the sourcing of businesses, financial constraints and also co-ordination of the wedding theme, which were to become my business niche.

By producing a niche, I now had the basis on which to start founding my new idea; a wedding magazine to be sold within its own shop. I knew the market comprised of bridal boutiques, florists, wedding planners etc. However my aim was to supply a hands-on experience for brides to co-ordinate their weddings efficiently using a pre-selected directory of locally sourced reputable businesses.

 I planned to supply workshops for DIY options to brides and to host events in which brides could relax and enjoy the company of other brides to share their ideas and even structure this towards the planning of their weddings i.e. dinner nights in which the brides could sample menus from local caterers to consider for their big day.

This type of venture would rely heavily upon building strong business relationships whereby I could constantly offer work opportunities to preview and showcase the businesses and their services and earn money through brides paying entry to these events and also deposits from businesses to take part.

The business was exclusively local and the magazine was to be sold only through the shop and its affiliates’ shops. I was going to make the exclusivity of this product/ service a unique marketing strategy to gain interest.

I analysed wedding magazines and their websites, contacted wedding planners and smaller wedding businesses to gain statistics regarding advertising rates, production and manufacture timescales, qualitative and quantitative customer data in order for me to gain an understanding of business processes and finance.

Creating lists of articles, general styles, themes and content that these competitors were supplying and furthered my research by producing a market survey in which I asked my target customers to comment on their favourite features, styles, contents and aesthetics.

Additionally I approached local businesses to gauge their level of interest in my proposal of offering them advertising within my business.

The results of these surveys were very positive in favour of my business idea. I found that there were three main concerns highlighted when planning weddings:

1. Sourcing reputable businesses: Reliable and trustworthy, capable of supplying demands with expected quality.
2. Financial planning: Not enough budgeting tools made available to couples to adequately estimate the overall costs.
3. Co-ordination of the theme: Difficulty in sourcing products to compliment the chosen wedding theme.

Identifying sufficient interest through survey feedback from both couples and businesses led me to generate a financial model, which identified risks and gauged the feasibility of the venture.

The main areas of financial risk identified in the research were the assets, direct/variable costs, fixed overhead costs and loaned finance.

Assets

• The business would require suitable I.T to support the design and publication of the magazine and its adverts.
• Office equipment and furnishings would be required for the shop itself.

Direct costs

• Labour costs for the design, materials and manufacture of the magazine
• Staff wages within the shop
• Marketing

Fixed costs

• The overheads associated with running the shop i.e. utility bills, rent etc were a significant risk to the business case.

Loans and financial support

• The cost of loan repayment/ interest for funding borrowed in order to maintain a healthy cash flow.

The costs of the overheads of the shop, manufacture of the magazine, employment of personnel, together with the costs of borrowing money proved the business was not financially viable.

Having understood the financial factors which made the business unviable, I needed to find a new solution which eliminated those factors. I.e. eliminate/ reduce overheads, production and staff.

Further research into competitors and market feedback identified a solution that proved more financially viable as it eliminated most of the financial risks already identified.

The solution, to create a web based wedding magazine that addressed the issues highlighted as concerns by the consumers. This magazine was to offer viewers inspiring wedding themed photography and an approved business directory.

The unique selling point for the website:

·        Integrated budget planning application undeveloped by competitors

·         Innovation of viewers being able to interact/ generate simulations of their weddings

·        Communicate with online consultant

With substantial primary research into my chosen target market, the next crucial evidence required to support this venture’s viability was financial; the key factor that failed the previous proposal.

To understand the financial viability of this new proposal, I conducted more detailed research through direct contact with existing internet wedding services to gauge the areas of costs for the setup and maintenance of the website.

The most common method of financing their websites was through providing advertising in:

CPC (cost per click)

• Generating payment through commission every time a business’ advert is clicked on and visited.

CPM (cost per thousand) and CPI (Cost per impression)

• For every thousand website visitors who will see the advertisements around my website, a sum is transacted directly to my account. This option however is most commonly practised among better established businesses

Fixed rate

• A standard contract of a fixed amount charged to advertise within the website.

With statistical data from local businesses I created a financial cash flow projection simulating income/ expenditures required for the successful run of this venture.

I factored in the costs of utility bills for the computer and broadband rates, materials, travel, professional services required and any additional financial support I was eligible for. This model was crucial to identify any flaws within my business plan that had been overlooked as before financially.

With high levels of market interest, a clearly focussed business plan and successful financial projections, it was now possible to generate a marketing strategy effectively promoting my business.

The most obvious marketing advantage online would be to utilise meta-tags throughout my website; hyperlinking HTML codes to words commonly searched online by my target market; directing them to my website more effectively.

Supporting the local community being core to my business, co-ordinating with local wedding events and community projects would better establish awareness of my business to my target market.

With the aesthetic of our website being inspiring, innovative and revived, this separated us from our competitors with their highly categorised approaches to deliverance.

To attract our business partners we had to ensure the website offered:

• The best advertising rates and promotional value
• Strong and reliable business relationships
• Innovative new ways of promoting their products and services
• A personal means of communication
• Exclusivity as a unique selling point to their customers

Through much trial and error, model simulations and on-going amounts of research, primary and secondary, numerical and statistical I have come to the conclusion that my business has been proved a successful venture.

The process towards discovering the potential in my business proposal has been a long and hard journey. It has been both interesting and discouraging at times, when identifying the greatly varying branches of research required when setting up a new business.

Initially most research conducted was secondary; however upon critical analysis it became clear that research into the chosen market and your position within it were essentially the deciding factors as to whether your business had any potential.

Additionally I learned that alongside important market research, financial modelling was crucial to identify flaws within the business plan. This was the main cause of the several proposal changes of my business.

Considering these learning outcomes, I would definitely focus more research towards market positioning and the finances determining the survival of a business.

Satisfied with the successful culmination of my research I feel secure in the prospect of my business being successful. Next stages from this business report are to consider establishing the website and building a solid foundation within the marketplace through my determined strategies.