URBAN OUTFITTERS CREATING BUSINESS

Business PLAN: Urban Outfitters Creating a Business



Business Plan: Urban Outfitters Creating a Business

Introduction

When an entrepreneur starts a business, he faces a multitude to challenges that hampers his way to success. Following are some of the challenges faced when an entrepreneur sets up a new business.

Challenges Faced When Setting Up a Business

Nothing New To Establish

Many people starting a business have no clear idea as to why people should buy from them rather than from their existing supplier of competitive products and services. Indeed, many budding entrepreneurs have little or no idea what governs their potential customers' purchase decisions. Trying to sell sausages to consumers who are largely preoccupied with buying sizzle can be a futile exercise (Cooper, 2005). If there is nothing distinctive about your product or service, or the way you plan to do business, you must surely question why anyone would want to buy from you, it may only be that your opening hours are different and that customers feel that matters; or that you keep your promises while operating in a sector, such as a building or the motor trade, which is renowned for diminished integrity. You must have an idea that matters in the market.

Cash Flow Crises

Too few new businesses prepare cash flow forecasts at the outset and maintain a permanent one-year projection when they begin to trade. Received wisdom is that all forecasts are wrong, which can lead the unwise to believe they are a waste of time. Paradoxically, it is exactly because events are so unpredictable that cash flow projections are essential. Expenses occur that you did not anticipate; customers take longer than expected to find and then take longer still to pay up. Following graph shows the successes and failures of various business ventures in United States:

Lack of Expertise

Starting any business from scratch requires remarkable versatility from any entrepreneur. The typical entrepreneur types the invoices with one finger in the evenings, does the books at the weekend, sells on Monday, makes the goods from Tuesday and delivers whenever he or she can. People whose only experience has been in a large firm may find it difficult to become jack-of-all-trades. While being able to turn your hand to multiple tasks is important, you still need some experience of the industry you plan to start up. Not only do you have to learn how to start a business, and all the new tasks that involves, but you also have to learn about a new market with customers, suppliers and workers about whom you know practically nothing. All learning has to be bought at some price. For those lacking expertise in the sector they are going into, this learning is often gained by making mistakes, which in turn consume scarce cash resources. This goes some way to explaining why business failure rates are so much higher in the early years.

At no time does this lack of expertise show up faster, and with more disastrous consequences, than during a ...