Assessment of current risks and opportunities
The current risks are high and if not calculated properly they could cripple my start up. The risks posed by competitors are high as if my business does not cater to the local population of Halifax I risk losing a large portion of the market to larger competitors such as the national supermarket Tesco who have a range of products aimed towards an international market targeting groups such as Indian communities who consume products such as Ghee (A saturated butter) and Mango juice. If I do not cater to the demands of this market segment I risk losing customers to large corporations such as Tesco in turn leading to my business potentially being choked out of the market leading to a spiralling decrease in profits leading to a definite loss of business. Companies like Asda (Large national supermarket) were losing their market share to local convenience stores that cater to the local Indo-Pak communities which according to the demographical section on the Wikipedia article on Halifax the indo-pak population constitutes approximately 10% of the population of Halifax meaning if I do not cater to this demographical group I risk losing a tenth of the market to competitors and miss a large opportunity to counter this loss and re-establish their market dominance they introduced a line of products such value packs of basmati rice which not only cater to the Asian market but also to target families and other groups that cohabite in the same residence. Products like these allowed Tesco & Asda to approach this market in a consumer friendly way and supply to the local market which lead to a loss of profit for local businesses this will be a risk for my business as supermarkets can secure contracts with suppliers and buy products in bulk whereas I am not able to do so as upon start-up my business will not have the financial clout to buy such quantities needed to rival large corporations. To counter the influence of large corporations I will secure contracts with local suppliers and work out a deal where they get fair prices rather than the bare minimum supermarkets pay local suppliers by doing this I gain contracts that would have otherwise been handed out to large corporations thus blocking the competition from gaining a market share allowing me to become dominant in the market increasing profit and allowing my start up to lower costs in future as with growth of the business I will need to order more stock and suppliers will lower prices when products are bought in bulk allowing me to stem the market share of large corporations and prevent them from segmenting as the market will be saturated with my products ensuring my business will have a firm local market presence.
Another risk I face is the location of the business as if I place my business on the high street I will incur high property prices and lease. Which means if I open my start-up in a high foot fall area like the high street are naturally more expensive as these areas are the best areas to open retail businesses as the business is exposed to large amounts of high amounts of potential customers? Aside from the benefit of having high exposure to potential customers the downside is that the costs monthly for lease will be much higher compared to areas further out from the town centre however if I situate my business further out I risk my business being overlooked by customers leading to a loss of profits and low sales which initially may mean my business does not generate enough income in its infancy to be sustainable leading to my running costs getting higher than my income leading to the failure of my business. To counter this I will get a mortgage to buy the property meaning I won’t have to pay monthly amounts towards the rent for the business as I will own it and depending on the terms on the mortgage I may not have to pay into the mortgage for five years and it could be paid off over twenty five years. This allows me to