Equity Portfolio Management: A New Business Idea

This paper discusses the development of a new business idea for equity portfolio management, including market gap analysis, proposed business model, feasibility, and marketing mix. The target market is lower income groups in Australia, and the business aims to provide consultation services for equity trading portfolios. The paper also discusses the critical success factors and the value proposition for the proposed business. Subject: Business, Course Code: N/A, Course Name: N/A, College/University: N/A

Running head: THINK BIG
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Name of the Student
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Abstract
The aim of this paper is to develop a proper innovative business idea. This business idea is
developed for the integration into the equity share industry. The business idea that is developed
in this section is about the equity portfolio management. The existing market gap in the industry
has been discussed. The different things that have been considered are the location of the
business, market feasibility, the target market segmentation and the barriers that come up in this
industry have been evaluated as well. The different issues in this industry have been revieed. The
business model has been described. The location of the business is at Adelaide and the business
will be operated all over Australia. The best quality services should be delivered across the
country properly.

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Table of Contents
Introduction......................................................................................................................................3
The need analysis to identify the market gap..................................................................................3
Company name and overview.........................................................................................................4
Target market...................................................................................................................................5
Product differentiation strategy.......................................................................................................5
Proposed business model.................................................................................................................6
Critical success factors....................................................................................................................6
Feasibility of the business idea........................................................................................................7
Marketing Mix.................................................................................................................................8
Group work......................................................................................................................................9
Conclusion.....................................................................................................................................10
Strength of the business idea.........................................................................................................11
Industry related issues....................................................................................................................12
Customer related issues.................................................................................................................13
References and Bibliography.........................................................................................................14
Appendices....................................................................................................................................16

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Introduction
One of the most important things to run the business in a good manner is the
entrepreneurship. The modern business environment is very much competitive in almost every
industry. The competition is growing among all the companies to get the competitive advantage
over one another. As a result of the growing competition, the customers prefer the businesses
that will give them the best facilities and offers. This is why the businesses must be able to
provide the business organizations the best offers for the customers. In this mode of competition,
it will also be important to bring up an innovative idea. The innovative business ideas will help
the organizations to provide the customers with the best opportunities for choosing the best
offers. The business managers should be able to know about the desires of the customers in the
best ways. So, the entrepreneurs will look to set up the business models for capturing the
business (Armstrong et al., 2015). The startup business owners will definitely look to get the best
benefits out of their businesses. In this business report, the aim will be to justify the proposed
new business idea, preparation of the business model for the idea, discussing the feasibility about
the business idea, judging the recommendation and summarizing the entire thing. The proposed
new business idea for this paper will be providing the customers with the proper guidance that
relates to their equity trading portfolios (Drucker, 2014).
The need analysis to identify the market gap
One of the major things in this section is the identification of the market gap to launch
this kind of new business. The need for this kind of business has been increasing. The market
gap is generally the basis for launching a new business. It has been studies and found that many
people have great interest in investing and trading in the equity market. The equity market has
been identified as the most important medium between the sellers and buyers for the shares of

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the organizations. These shares of the organizations are generally on the Australian Exchanges.
Many individual people or the corporate groups have shown the interest in selling or buying
these shares effectively (De Mooij, 2013) They buy and sell these ideas based upon the analysis
of their personality. The business that will be discussed in this section will provide the customers
with the consultation services. The customers will be guided by the business owners on which
shares they should invest. Along with this, the startup business owners will also look to consult
with the customers about how many shares they should buy and for how much time they should
invest in it (Drucker, 2014).
It has also been seen that many people suffer great losses at the time of trading. The
owners should go through the thorough analysis of the shares and judging the appetite of the
people for taking the risks (Malhotra & Peterson, 2014). Most of the people only take interest in
the equity after reading the important news. The understanding about investing in the shares
requires the proper analysis of the background of the companies, economic and industrial trends.
The purpose of this new business will be to discuss about the customer risks and make the proper
designs for the portfolios for profit (De Mooij, 2013)
Company name and overview
The name of the company to begin this business is Braithwaite Finance Limited. This
company has been launched in the year 2016 and they are planning to provide the customers with
the proper guidance for the equity trading portfolios. They will need to make a proper customer
target market based on the desires of the customers. They have planned to stay very active on the
social media to connect with the customers.

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Target market
It is very important to discuss about the target market for this business. The business
owners will look to meet the desires of the customers by providing them all the services they
need (Armstrong et al., 2015). This equity consultancy business will look to target the people
who invest in the equity market very frequently. The people who possess a current portfolio or
potential portfolio around AUD 6000 in the equity market can be considered as the target
audience for this business. The business will be carried out all over in Australia but the
headquarters of this business will be located in Adelaide. The business owners will specifically
target the .lower income segments of the society because they want to guide the people with the
penny stocks so they can get high returns including the high risks effectively. The investments
would be made at a low cost (Kirzner, 2015).
Product differentiation strategy
The product differentiation strategy is a very important strategy by which the
organizations can gain the competitive advantage over one another. Some people believe in the
concept equity trading is very expensive. This conception can be broken by the company as they
aim at the lower income groups (Armstrong et al., 2015). The lower income groups will be able
to invest in the tight penny stocks. This can be categorized by low investment, high business
risks and high returns on investment. The smaller forms have the penny stocks. The
organizations in this business would like to recruit such experts who have a wide range of
experience in the trading industry (Malhotra & Peterson, 2014). The organizations will provide
them with the best tools of information technology and statistics. This will help them to conduct
a proper research to provide a detailed analysis (Schaper et al., 2014).

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Proposed business model
The business model is a very important thing to be discussed for highlighting the roles
and interconnections between the nine building blocks. The business should aim at the customers
by going through a proper research work and sales activities (De Mooij, 2013). This will be
effective for doing the marketing including the public relations, promotional activities and cold
calls. Once they get the customers with an effective number, they will need to appoint a
relationship manager who could manage the current portfolio for the customers and design the
potential portfolio as well (Area, 2014). He would also be responsible for providing the
customers with the everyday guidance about which stocks they should invest in. It is very
important that the clients should be able to reach the relationship managers (Drucker, 2014). He
would update the portfolio and send it to the customers.
In this model, there will be two revenue models to be adopted (Burns, 2016). The
business operators can give the customers option for paying the advance fees that will be around
the 25% of their current portfolio (Rackley, 2015). Another process would be to pay around 5-
10% of their portfolio and share the 35% profits at the end of six months. The business managers
will make the clients sign the annual contracts based on which they can earn the profits. The
volatility will always be there and it will take some time to get the profits. The consultancy will
show the profits to the clients.
Value proposition for the proposed business
In this section, the value proposition for this business in equity industry will be discussed
properly. The relationship managers will have to make sure if all the investments of the
shareholders can be turned into benefits. The business partners must have the accountability for

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all the financial steps that they will take. The proper solutions for all the queries of the customers
should be provided by the organization. The benefits of the investments should always be
clarified to the investors firmly. The managers should offer the target market with best
investments opportunities. This would highly benefits to the customers. There might be some
risks in this business but the amount of the return of investment is very high as well. They might
opt to work with the niche target market. The relationship managers should held up some
meetings with the customers to make them understand the importance of the investment
opportunities. The value for this business can only be created when the investors will get rid of
the fear of the losses through the risks and begin to see the bright side of the picture. Thus they
can highly achieve the trust of the target customers.
Critical success factors
The critical success factors are important for this business to gain the trust of the clients.
The risks are very high so the business managers should manage the risks properly. These factors
are very significant for gaining the profits. The success factors are-
 Making long term relationships with the clients by retaining almost 80% of them
 Break even within 2.5 years of being set up (Amit & Zott, 2012).
 The growth rate of the organizations should be tracked. The advice rate should be around
75% accurate.
Feasibility of the business idea
The knowledge based resources should be the basic resources for the equity consultancy
business. The economic feasibility of the business is the following:-

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Particulars Approximate expenses
Recruitment costs and salaries of employees AUD 5000
IT expenses – Bloomberg Terminal and live
screen
AUD 10000
Rent and office infrastructure AUD 5000
Sales, marketing and PR costs AUD 5500
Office overheads AUD 2000
Total AUD 27500
Forecast revenue
Year Expected Costs Expected Revenue
Year 1 AUD 30000 >= AUD 26000
Year 2 AUD 40000 >= AUD 45000
Thus, the business will be able to reach the breakeven point in tge second year of their
running. Thus the managers have an excellent chance to increase the interest of the customers.
Marketing Mix
Product
 The relationship manager should be responsible enough to provide the recommendations
regularly to clients.
 The customer service management should be very effective (Gordon, 2012).

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 Updating the portfolio regularly and managing the portfolio properly.
 The industry analysis should be provided properly as well (Vismara, 2016).
Price
The price penetration strategy should be adopted by the business. This penetration pricing
strategy offers their businesses to fix the price of their services much lower in rate than their
rivals in the industry. Thus they can get a huge customer base (Gordon, 2012).
Place
The head office of the business would be located at Adelaide but the clients should be
targeted from all over the country (Gordon, 2012). They would target at the clients by cold calls,
promotional activities and help of the sales team.
Promotion
Digital marketing strategy
In this way, their services would be promoted through several digital platforms (Tuten &
Solomon, 2017). The brand reputation and awareness could be increased through the effects of
digital marketing. They can promote their services through the social media platforms (Ray,
2013).
Advertising through the financial news channels
All the people who invest in the equity markets always keep an eye on the financial news
all over the world. If the business advertises about their works on the financial news, this will be
effective for them to make the promotion for the brand.

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Print media advertisements
The print media promotions are very effective tools for promoting the brands. The print
media can send the idea of this business to a large number.
Group work
With the progress of this assignment, we had worked with the group of three people. All
of us thought about this for a long time and finally came up with this idea. We communicated
with each other openly and had the utmost transparency in conveying our messages. We all
wanted to find the resolution for our conflicts in an honest way. All the members in the group
had the awareness about our expert capabilities. Thus we all collaborated properly to make this
project a success.
I had been successful when I went to collaborate with all our members when we went to
attend the various workshops. We always wanted to indulge in participating with the entire group
in a fruitful way. This method working together as a group always enriched our mutual
understanding and thus we were able to sort iut the differences that came between us. The open
communication process made us believe in the process properly. We wanted to communicate
with each other in an honest way that could settle the differences between us very effectively
indeed. Personally saying, I had a great time with all the team members and I had learned a lot.
This has added to my growth opportunities as an entrepreneur.
It needs huge patience when we have to work under a team effectively. We were very
much motivated and took all the initiatives to eradicate all the issues. The initiatives helped us to
grow more. Thus we could mitigate all the risks we all had faced. The participation of taking part

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in the workshops had been very much effective indeed. These workshops had given us with the
needed guidance and assistance for our needed growth.
Conclusion
It is the entrepreneurship that helps the economy to grow from all the perspectives within
a country. If the level of entrepreneurship has to grow high, the organizations must be able to
contribute effectively as well. They have to focus consistently on the innovation process. In this
report, a new business idea has been presented of equity portfolio. This business aims at
providing the proper guidance for customers for investing in penny stocks. These penny stocks
generally are the shares of the new organizations. These stocks can ensure the high return on
investments including the high risks. The unique selling point in this business is to be an expert
in the penny stocks. The business will offer several opportunities for the making the customers
opportunities very much effective. The business idea might reach the breakeven point within two
years of establishment. The brand value of this business is needed to be increased.

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Strength of the business idea
Low Potential (-1) Moderate potential (0) High potential (+1)
1. Extent to which the
idea:
 Takes
advantage of
an
environmental
trend
 Solves
problem
 Addressed an
unfilled gap in
the market
Weak Moderate Strong
Timelines of entry to
market
Not timely Moderately timely Very timely
Extent to which the
idea ‘adds value’ for
its buyer or end user
Low Medium Higher
Extent to which the
customer is satisfied
by competing
products that are
Very satisfied Moderately satisfied Not very satisfied or
ambivalent

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already available
Degree to which the
idea requires
customers to change
their basic practices or
behaviors
Substantial/ changes
required
Moderate changes
required
Small to no changes
required
Industry related issues
Low Potential (-1) Moderate potential (0) High potential (+1)
Number of competitors Many Few None
Stage of in ustry life
cycle
Maturity phase of
decline phase
Growth phase Emergence phase
Growth rate of industry Little or no growth Moderate growth Strong growth
Importance of industry’s
products and services to
customers
Ambivalent Would like to have Must have
Industry operating
margins
Low Moderate High
Customer related issues
Low Potential (-1) Moderate potential (0) High potential (+1
Identification of the
target market for the
Difficult to identify May be able to identify Identified

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proposed new venture
Ability to create
‘barriers to entry’ for
potential competitors
Unable to create May or may not be able
to create
Identified
Purchasing power of
customers
Low Moderate High
Ease of making
customers aware of the
new product or service
Low Moderate High
Growth potential of
target market
Low Moderate High

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References and Bibliography
Amit, R., & Zott, C. (2012). Creating value through business model innovation. MIT Sloan
Management Review, 53(3), 41.
Area, M. C. (2014). Return on Investment.
Armstrong, G., Kotler, P., Harker, M., & Brennan, R. (2015). Marketing: an introduction.
Pearson Education.
Burns, P. (2016). Entrepreneurship and small business. Palgrave Macmillan Limited.
Chandra, P. (2017). Investment analysis and portfolio management. McGraw-Hill Education.
De Mooij, M. (2013). Global marketing and advertising: Understanding cultural paradoxes.
Sage Publications.
Drucker, P. (2014). Innovation and entrepreneurship. Routledge.
Gordon, R. (2012). Re-thinking and re-tooling the social marketing mix. Australasian Marketing
Journal (AMJ), 20(2), 122-126.
Kirzner, I. M. (2015). Competition and entrepreneurship. University of Chicago press.
Malhotra, N. K., & Peterson, M. (2014). Basic marketing research. Pearson.
Michalski, G. (2013). Portfolio management approach in trade credit decision making. arXiv
preprint arXiv:1301.3823.
Rackley, J. (2015). Return on Investment. In Marketing Analytics Roadmap (pp. 71-85). Apress,
Berkeley, CA.

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Ray Gehani, R. (2013). Innovative strategic leader transforming from a low-cost strategy to
product differentiation strategy. Journal of technology management & innovation, 8(2),
144-155.
Schaper, M. T., Volery, T., Weber, P. C., & Gibson, B. (2014). Entrepreneurship and small
business.
Tuten, T. L., & Solomon, M. R. (2017). Social media marketing. Sage.
Vismara, S. (2016). Equity retention and social network theory in equity crowdfunding. Small
Business Economics, 46(4), 579-590.

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Appendices
Key Partners Key activities Value
Proposition
Customer
relations
Customer
segments
The people who
brainstormed this
business idea
Customer
relationship
management.
Daily sales
research
Managing the
portfolios,
increase in the
profits
Department of
CRM, meeting
with clients
frequently by the
relationship
manager
People or
corporate groups
investing in equity
market
Key Resources Channels
Brand value of
the business and
human resource
knowledge
Cold calls,
meetings and
referrals
Cost Structure Revenue Structure
Fixed cost strategy
HRM cost
Office cost
Sales cost
Advanced fees, bonus amounts shared by clients

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IT cost
Training cost
Variable Cost:
Promotion expenses