Business Plan for Startup SME Company

Business Plan for QW Consultancy

Situation Analysis

SME and Start Up Companies Operating from Cambridge UK and Relational Competitor Analysis between QW Consultancy and Potential Competitors in Cambridge

The situation analysis will primarily address the strengths, weaknesses, opportunities and threats this new company could face in the transition from a theoretical construct to being a viable operative capable of mounting credible competition with other companies willing to offer similar consultancy services, or similar services within the generic and holistic framework of complete corporate consultancy services. The focus will be a relational comparison between Cambridge, UK, where the new company will be based and the rest of the UK, the EU and the international community. This analysis will be devoted to the analysis of these strengths, weaknesses; opportunities and threats (the classic SWOT analysis formulation) specifically within this geographical context.

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In a lot of ways the vulnerability of SMEs and Start-Up companies is a major strength and opportunity for QW, as the service that QW wish to provide will specifically target small businesses in order to give them consultancy advice in relation to the issues which will be relevant in terms of initial start up processes. Therefore a more complete understanding of the business, economic and social environment that small businesses typically operate in, in regional towns like Cambridge is paramount in building the business acumen necessary to mount and sustain an effective business operation. As Reid (1995) explains:

‘The typical firm….is surrounded by some rivals with regional markets (25 per cent) and others with no more than local markets (20 per cent). A few (2 per cent) operate internationally. The typical firm….can readily distinguish major from minor competitors and has about three of each. Its principal product is a mildly differentiated commodity which it would characterize as ‘similar’ to that of its rivals. Its customers vary in the extent to which they are well-informed. The typical customer is well-informed, and has a least some familiarity with the technical features of the products, and some experience, directly or indirectly, of consuming them….^[1]’.

It is clear therefore, that QW will rely heavily upon the local economy in Cambridge, a relatively moderately populated location (the population of Cambridge as counted in the last census is represented in diagrammatic form^[2] in the schedule attached^[3]). Accordingly the success of QW is likely to mainly be contingent upon local factors, which in turn will be heavily affected by local competitors. Also, particularly in light of Reid’s analysis above, QW needs to understand that although it is a novel concept for a consultancy firm to provide consultancy services specifically to the small business sector, and although, according to the business plan it is anticipated that this will fill a gap in the market, QW must not over estimate the uniqueness of their idea. Their idea essentially involves a singular focus on the SME and start-up business sectors in terms of delivering consultancy services. However, if one examines Diagram One ((which gives a breakdown of the main companies that offers similar consultancy services in Cambridge, UK, and therefore represents the potential main competitors which QW would encounter if they set up in Cambridge, UK) and which the writer has attached in the Diagrams Section, at the end of this document), it is integral to note that a significant percentage of the largest companies offering consultancy services in Cambridge target the same publics that QW propose to i.e. the start-up business sector and the SME sector.

Also, it is important for QW to be aware that these competitors, (while they have got a range of services, only one element of which is usually targeted at the start-up and SME sector), still represent a major threat to the economic success of QW. Indeed, this situation will be a major threat to (and weakness of) QW along with the usual threats faced by fledgling companies. Anderson et al. (1993) give us an insight into these more generic threats:

‘Typically…business is forced to operate in market niches….These niches are often market segments which are relatively small in size and may be lacking in adequate growth or profitability opportunities, unless skilfully exploited. Limited physical, financial and human resources, a lack of industrial experience and of business acumen on the part of owner-managers….are frequently to blame for poor exploitation of these fragile niches. Nevertheless, if a…(business)….is to grow and prosper, rather than simply to survive, over a non-trivial period of time (say more than three years), it must properly identify, develop and implement the requisite business strategy…^[4]’.

Therefore specifically in terms of Cambridge, UK, QW should consider setting up a presence alongside their competitors, with a strong focus on what makes their service unique (including exclusive pricing policies). As these SME and start up company specific services, and similar ones are offered by their main competitors such as Ernst and Young, PriceWaterhouseCoopers and Oakland, and because consultancy itself is such a fluid concept which is often misinterpreted or misunderstood by the end user of the service, QW need to keep two things in mind. Firstly, their planned marketing efforts should be targeted to establish their presence alongside that of their competitors, which will help to differentiate the service QW have to offer. Therefore, QW may wish to consider advertising in the Yellow Pages.

Secondly, QW should consider using the voluntary and government sponsored sector within Cambridge to assist them to advertise their service. Therefore, they should potentially consider doing leaflet drops with agencies such as the East of England Regional Development Centre which is responsible for offering assistance to SMEs and Start-Up companies in Cambridge. Also, a similar initiative could be targeted at the St John’s Innovation Centre, in Cambridge which has a similar function. In this way, QW may be able to take advantage of inexpensive advertising for their new company and they will get a high level of exposure to desired publics.

QW may also wish to set up a website, as many of their competitors listed in Diagram One have. Also, in terms of safeguarding the unique idea that their proposed company is based upon, QW may wish to consider registering this in order to secure intellectual property rights in their concept, as is their right in light of the developments the law has made in terms of offering intellectual property security. Pietrobelli, C. and Sverrisson, A. (2003) have pointed to the importance of taking such measures and they have also outlined the reasons why a company or product is vulnerable in the absence of such measures:

‘…the increase in research and development (R&D) costs, the shortening of the life-cycle of products, difficulties of appropriating R&D results, particularly in the field of easy-to-copy new technologies (such as computer programs), and the shift toward a global, knowledge-based economy, prompted a far-reaching reform of the intellectual property system (Correa 1994; David 1993)…..^[5]’.

In conclusion therefore, this document has looked at the position of QW in light of their business plan proposals. The piece has been demographically and geographically evaluated with reference to QW’s intentions to locate in Cambridge. Accordingly, the piece has looked at the competitors QW would be likely to encounter in this location and has examined how related factors may impact upon the likely success of QW. An analysis of the generic threats a business may face was looked at as a prelude to the more detailed study of how QW may operate within Cambridge, UK.

Bibliography

Books

Anderson, M., Jacobsen, L. and Reid, G. (1993). Profiles in Small Business: A Competitive Strategy Approach. Publisher: Routledge. Place of Publication: New York.

Pietrobelli, C. and Sverrisson, A. (2003) Linking Local and Global Economies: The Ties That Bind. Publisher: Routledge. Place of Publication: New York.

Reid, G. (1995) Small Business Enterprise: An Economic Analysis. Publisher: Routledge. Place of Publication: New York.

Website

<< http://www.statistics.gov.uk/census2001/pyramids/pages/12ub.asp >>.

DIAGRAMS SCHEDULE

DIAGRAM ONE

DIAGRAM TWO

1

Footnotes

^[1] P52. Reid, G. (1995) Small Business Enterprise: An Economic Analysis. Publisher: Routledge. Place of Publication: New York.

^[2] Available at: << http://www.statistics.gov.uk/census2001/pyramids/pages/12ub.asp >>.

^[3] This diagram also denotes how many adults this population contains.

^[4] P121. Anderson, M., Jacobsen, L. and Reid, G. (1993). Profiles in Small Business: A Competitive Strategy Approach. Publisher: Routledge. Place of Publication: New York.

^[5] P220. Pietrobelli, C. and Sverrisson, A. (2003) Linking Local and Global Economies: The Ties That Bind. Publisher: Routledge. Place of Publication: New York.