Business Venture Planning: Market Analysis, Legal Structure and Skills

This assignment outlines the essential steps in planning a new business venture, focusing on market analysis, identifying market needs, assessing risks, and proposing a suitable legal form. The analysis begins with an examination of market conditions using the PEST framework (Political, Economic, Social, and Technical factors) to understand external influences. It then delves into identifying market needs through methods like GAP analysis and defining target markets. The assignment also assesses potential barriers, limitations, and risks associated with the venture, including financial, legal, and competitive challenges. Furthermore, it proposes and justifies a legal form for the business, highlighting the advantages and disadvantages of a partnership. Finally, it evaluates the skills, experience, and resources required to introduce and establish the new business, emphasizing core skills, project management, and business planning expertise. The assignment provides a comprehensive overview of the key considerations for successful business planning.

Planning a New Business Venture
By
Submission Date

Task 1
Analyze how market conditions can affect the market potential for a new business
When a new company is trying to establish itself in the market, it may encounter several difficult hurdles
that it must overcome. As a result, analyzing these barriers before beginning operations is a critical step
that every new company endeavour should do to increase its chances of success. Therefore, a PEST
study is one of the first procedures that a company would evaluate the external environment of market
circumstances that may affect the business. PEST is an acronym for Political, Economic, Social, and
Technical aspects, which we shall explore more below. (Frue, 2020)
Political factors: These factors revolve around how and to what extent the government intervenes in
the economy or a specific industry. Essentially, all of the government's influences on a business will
classify under this heading. Government policy, political stability or instability, corruption, foreign trade
policy, tax policy, labour law, environmental law, and trade restrictions are examples. Furthermore, the
government can significantly influence a country's education system, infrastructure, and health
regulations. All of these factors take to account when determining the attractiveness of a potential
market. (Frue, 2020)
Economic factors relate to how the government balances taxes, interest, and inflation rates and lowers
the unemployment rate. As a result, any changes in these variables will affect a company. For example, if
a bank raises taxes or interest rates, the firm's debt will rise; this also implies less disposable money in
the public, causing business sales to fall. Investors will deter from investing during a period of high
interest, which a new company endeavour must consider since an investor may be necessary for them
to get started. (Frue, 2020)
Social factors include market size, population, age, market demand, and desire to purchase, all of which
will impact a new company's endeavour. First, a company must analyze how crowded the market is. If it
is saturated, it must offer fresh ideas that will enable it to stand out among the other established
organizations. When it comes to businesses entering a developing market, it is best to design a product
or service that appears to be in demand to enable a new company to sell to a wide range of individuals.
(Frue, 2020)
Technical factors: Because of recent technological advances, companies have been able to advertise to a
much more significant percentage of prospective consumers, enabling them to create a brand image via

logos, websites, and customer evaluations. Technology has also made it much simpler for companies to
analyze competition by comparing marketing tactics, pricing, and goods with the press of a button. A
new company should undoubtedly think about utilizing technology to aid them before starting
operations, such as stock control technology, e-commerce, and data collection analysis, which will help
the firm manage itself and stay ahead of its competitors. (Frue, 2020)
Explain how to identify a market need and target markets for a new business venture
New business ventures must analyze which markets are saturated and unsaturated to determine what
products and services they can offer the public to differentiate themselves from the competition. One
method for doing so is to use PEST, which analyses the environmental factors that could impact the
business positively and negatively. GAP analysis may also evaluate how the actual business performance
compares to the anticipated business performance. A company can utilize this study on competition to
identify the gaps in the market and use this to their advantage to fulfil market requirements. When a
company determines the market needs, it must begin the research and development of a new product.
This development must analyze what the public wants the product to look like and its use. The company
will consider the product dimensions, the product's longevity, the purpose, and the target market.
During the product development process, a company may do product research to know better how to
customize the product for the public regarding price, market (national or worldwide), and how it should
deliver to consumers. In general, the goods produced by a new company aims at the domestic market.
However, if the business can grow and create product demand, it may enter the international market.
Another issue a company must ask is whether the product should be new and unique to the market or
expand on and improve current goods. Designing and selling a brand-new product is riskier than the
latter, but the potential for success and expansion is limitless if the product is a hit since competition will
not be there for some time. Targeting the right market must also be assessed by the business; for
example, properly targeting a new games console at older adults would not equate to many sales. The
company must also analyze how they will target their product; for example, targeting a games console
to teens and young adults would be the best. To market this product, the use of social media could be
beneficial. Age, gender, occupation, beliefs, and interests are few socioeconomic factors that businesses
must consider before marketing their product. Finally, targeting the product geographically must be
determined to have the most significant possibility of success. GAP analysis is another technique used by

companies to identify performance gaps between the optimum allocation and integration of inputs
(resources) and the present allocation level. This study will then highlight the areas in which the
company can improve. Undertaking this type of analysis, on the other hand, necessitates documenting
and improving the gap between business requirements and current capabilities so that the business can
improve on the areas that are achievable in the short run and other opportunities that may be
achievable in the long run. An example of this GAP analysis is a company that aims to provide the
highest levels of customer satisfaction in its industry compared to other competitors. Still, through the
GAP analysis, we find that customer service agents report high customer frustration levels during their
calls. Using GAP analysis, you can create a customer journey map and determine what causes customer
frustration by gathering quantitative data. This will determine the business's gap in satisfying the
customer, whether it is the product itself or the customer service the business provides customers when
they make inquiries. With the GAP analysis, the company may adopt various methods to combat these
negative discoveries, providing the company with a greater chance of reaching its goals and objectives.
Therefore, the market circumstances for the company will improve. (Lucidchart, 2019)
Assess potential barriers, limitations and risks for this business venture.
Various factors are to consider when starting a company endeavour, such as the Premium Contractors
organization. Firstly, Premium Contractors is in a partnership. Both partners may fund starting expenses
and participate in decision-making, thereby better controlling the company and achieving business
goals. Consequently, the risk factor for both people reduces by half, and if the company fails, neither
person has to bear the entire failure cost on their own. However, there is an unlimited liability with a
partnership, which implies any debts and obligations incurred by the firm must pay using the partners'
assets. A higher chance of insolvency for investors puts the new company’s endeavour in great danger.
A partnership may also result in slower decision-making because partners may disagree on different
topics. When partners fight, the working environment becomes worse and prospects of success
collapse. Since the company is commercial, risks may mitigate by using its personnel and owner's skills.
Nevertheless, as a new endeavour, the company will have trouble attracting talented and experienced
workers due to the lack of competitive compensation and employee perks. Premium Contractor's rivals
are well established and already have a brand image that employees want to be part of. Due to the
company model not having shareholder financing, there will be fewer options for expansion for the

partnership firm. This may result in cash flow issues. This idea of little change may mean that the
company risks the potential for the brand image to remain stagnant, and therefore prevent future
development. Early-stage funding of entrepreneurial businesses is scarce, making them vulnerable to a
financial catastrophe. Legal assistance is not obtainable since it has no legal basis. New companies are
confronted with financial risk, bankruptcy, environmental risk, competition, reputation, and political
peril. However, suppose Premium Contractors can plan wisely, being mindful of budgeting methods, and
make an investor-pleasing proposal to their investors. In that case, they will be able to build a realistic
business plan. (Corporate Finance Institute, 2020)
Task 2
Proposes and justifies a legal form for your new business venture
Premium Contractors must implement rules for the company to run effectively and without
interruption. Since Premium Contractors is a partnership, a signed copy of the contract between the two
partners indicating how earnings will split avoids confusion. The company must also adhere to the legal
responsibilities imposed by the government on partnerships, which include rules for how business taxes
calculate and how financing is achieved. For financial assistance, the firm should employ an accountant
who will assist the company in filing its financial statements with the company house to arrange their
assets and liabilities easily, allowing the owners to make better business choices. The company will not
get financing from shareholders; instead, they will raise money from their private finances to cover the
startup expenses connected with the new business endeavour. When there is a financial gap, the
company may seek loans from financial institutions and banks, which can assist kick start the business;
however, banks would seldom provide significant loans to this kind of business owing to the risk
element involved with it. There are no required laws and procedures for forming a new company
organization. Premium Contractors will require a tax certificate. Although registration of this kind of
business is not required, it is advantageous for the company to begin the endeavour with appropriate
paperwork and copyright, which is needed so that any other companies in the architectural sector do
not replicate the design of Premium Contractors in the future. This business will abide by some of the
other laws. To offer high-quality services, Premium Contractors will hire architects, engineers, interior
designers, and office workers, among others. As a result, this business will follow the Employment Equity

Act 1995 to offer equality in the organization Premium Contractors, which successfully hires staff
members under appropriate regulations and legislation. The Environmental Safety Act will follow by
Premium Contractor's business operation, which further improves the company's sustainable practice to
build up the business effectively. As a service provider, the personal information of its customers is
essential to the organization, which the Personal Information Protection and Electronic Documents Act
govern.
Task 3
Assess the skills, experience and other resources needed to introduce and establish the new business
venture
To function effectively, any firm must employ diverse individuals with varying talents and experience
levels. In addition, different kinds of industries will need different types of skills required to operate in
that sector. In this conversation, Premium Contractors will look at the talents and experiences that the
company should evaluate and use to function in a highly competitive market and stand out from the
competition by obtaining a competitive advantage. Core skills are typically the foundation of any
business; in the architecture industry, core skills can be described as having good communication, high
imagination, and creativity level, working under pressure and on a tight budget, and a keen interest in
the community and the surroundings.
Since the company is working on several projects simultaneously, it will need to hire people with project
management expertise and abilities. This manager will evaluate how each project progresses and
resolve any issues throughout operations in different initiatives. The project manager will be in charge of
what the workers do each day, putting people with particular talents in positions that fit them to
function at a high level of productivity while keeping the business's expenses as low as feasible. The
business must have business planning skills; this is when the company puts down the business's long and
short-term goals and objectives; these goals must be realistic and not far-fetched. The business and
workers may improve productivity and experience pride when delivering targets. Marketing is an
essential talent for a company to build a brand image and strong relationships with customers and
communities. Employing someone with excellent social media abilities would be helpful for Premium
Contractors since most of their marketing is done via this and their website. So that the business does

not fall behind on its liabilities or taxation requirements, it needs to have a skilled accountant and
bookkeeper. This individual will record each transaction the firm undertakes, both in and out of the
company, allowing for a much better analysis of the business performance so the owners can assess
where their limits for a given time frame would be. This ability will also make it easier to file accounts to
businesses' houses at the end of the tax year, lowering the danger of accounting errors and potential
fraud investigations. Leadership in the industry requires the company's operation; this ability is
necessary to increase, lead its workers in the correct direction and make business choices. Another
essential talent is communication; a constant, continuous flow of communication is required for the
company to successfully disseminate information from top to bottom. According to Premium
Contractors, communication should not be an issue when a small number of individuals are involved in
the early phases of a new company endeavour. Still, when they grow, effective lines of communication
must be analyzed and created. Delegation is an excellent skill to have in business, similar to project
management. This skill refers to how the company assigns individuals to specific roles based on their
skills and experiences for Premium Contractors, ensuring that the right architects for each project are
used for those projects to increase the chance of a sale. An architect with highly contemporary and
modern ideas, for example, would not be appropriate for a customer seeking a rustic farmhouse design.
Having reliable solid connections with all customers is essential for the company; clients will offer the
business feedback and promote the firm to friends and family, which may quickly increase the customer
base. This connection with consumers must be maintained by the company continuously listening to
what the clients want and need from their designs and delivering excellent service. Another crucial
resource that will be significant to the business's success is human resource management, which
involves hiring and advancing employees. The human resources manager should be hiring only the most
suitable candidates for the company. The business can gain a competitive edge over the competition
due to the better knowledge they have. The company must observe the financial side of things; each
piece of financial information must be analyzed and reported with the utmost honesty; this will allow
the company to obtain financing when needed, allowing it to stay financially stable. Every company
requires sufficient physical capacity, which includes appropriate premises and equipment. Another
essential resource for a company is information. For a creative service provider business like Premium
Contractors, all confidential information must safeguard from theft and unauthorized access. Finally,

effective resource management is critical for the establishment and operation of a corporate
organization. (The Balance Careers, 2020)
Explain how the financial requirements needed for the new business venture
Since Premium Contractors will establish as a Partnership, their financial obligations will be restricted, as
there is no legal necessity for a partnership to produce accounts. However, for tax reasons, the
association should prepare a balance sheet and a profit and loss statement to determine the business's
taxation level at the end of the tax year. A company should maintain these records for up to seven years
to give this information if the company house ever demands it again. If these statements are not on file,
the company may suffer plenaries and penalties. The accounts must be completed to the most accurate
and most complete records, prevent tax miscalculation, and provide potential investors with a detailed
business view. This reduces the risk of investing in a business that is in financial trouble. There must also
be a nominated partner in a partnership; this person will be the partner accountable for the meaning
and completion of the partnership's tax filings and accounting. This chosen partner will need to register
the company and themselves for self-assessment' so that the firm and the partners may evaluate
financially. Other critical financial needs include maintaining records of invoices and receipts, cashbooks,
inventory totals, payroll records, and any information of money taken from the company for the owners'
personal use. Profits and losses are shared between the two partners and documented in each partner's
self-assessment. The sales forecast is very critical for any kind of company organization. A company's
revenue-generating future potential may determine by predicting sales. This data assists a corporate
organization in making different business-related decisions. Organizations may utilize sales forecast
information to calculate their break-even point in sales. Premium Contractors, as a company, may
accomplish both short-term and long-term objectives through meeting financial obligations. The funds
required must be adequately evaluated and allocated to fulfill a company’s immediate and long-term
goals. Fulfilling the financial criteria may therefore assist a corporate organization in achieving its
objectives. (Corporate Finance Institute, 2020)
An assessment of the strengths, weaknesses and risks inherent in your business plan

Proper understanding of company strengths, flaws, and risks are critical when starting a new firm to
avoid failure. A helpful way to examine a company's strengths, weaknesses, opportunities, and threats
are to do a SWOT analysis. Having team members who are skilled in different business areas enables
them to adjust their proposals to clients' needs. Premium Contractors focus on making their ideas
environmentally friendly, which has grown into a massive sector due to recent growth, allowing
Premium Contractors to grow just as rapidly. Premium Contractors’ main drawback may be that it is a
startup, which is the same as every new company. It's challenging to build a client base if the business
lacks one. Additionally, financing may be challenging since financial organizations are reluctant to
provide money to a company with significant risk. Smaller companies have less time to keep up and
don't have the resources to expand as quickly, increasing the risk of insolvency because the company
may not want to embrace the growth. There are risks associated with this company's process. Risk
variables must be identified in this case, and a plan devised to reduce this risk. Contingency funds may
reduce the risk factor of a business organization. New projects and endeavours may not get contingency
funds until they've shown their success. In short, it may put the business in danger. In such a case, the
risks would have been studied before the operation began. In such a scenario, the company may
implement contingency plans to handle each adverse incident that may occur to the industry. (Mind
Tools, 2021)
Task 4
Prepare an evaluation of the different approaches that you could take to securing funding for your
new business venture.
All company initiatives need funding to begin operations. This may come from various sources of
financing, each of which will require the company to take a unique strategy to obtain this funding.
Premium Contractors is a Partnership, which implies that the two proprietors will put a significant
amount of their own money into the enterprise. This first investment will be the basis of the company,
and it will be made at the owners' risk. However, with a personal investment like this, there will be no
obligations or debts connected with it, which will help the business with its cash flow at the start of
operations. Companies can also use venture capital, a type of finance provided by venture capital firms,
to ventures that appear to have high growth potential. This is advantageous in creating a business
network, making it easy to locate, and improving trustworthiness. Thus, the organization may focus on

venture capital for setting up the business sustainably. Once the company has started operations, the
earnings generated by its activities are the primary source of money that may be used for day-to-day bill
payments. Premium Contractors may reinvest profits in the company for future development
possibilities and use them to pay off obligations such as employee salaries, taxes, and mortgage
payments. If these earnings do not cover the business's goals, loans from financial institutions may be
utilized to fund the objectives. Banks will see a new business endeavour as high risk, which means they
will not provide loans to the firm. Premium Contractors must engage the investors openly by explaining
the business idea to them. The business loan is beneficial for the firm in obtaining money and controlling
business operations, and the interest is tax-deductible owing to the loan amount. Crowd financing is a
kind of fundraising in which many individuals donate tiny amounts of money to create significant capital
for a new company's endeavour. Crowd financing is suitable for generating value for the company by
building effective marketing, but it has drawbacks such as wrong brand values, inadequate growth plan,
and project risks. If Premium Contractors were to become a limited company in the future, they would
assess a much more considerable amount of finance through share capital, which is the finance from
shareholder investment. Many businesses use this as a primary source of finance to expand and grow
the organization. Still, as a current partnership, Premium Contractors would not do so. Finally, the
company could approach private investors to invest in the company. These investors could be wealthy
businessmen looking for an opportunity or even family and friends who can use their savings to fund the
company. They may need a variety of application forms, which may be time-consuming and challenging
to obtain. Others may just need meetings with financing sources to evaluate how the proprietors of
Premium Contractors deliver the business's financial accounts. They may assess the company's
performance and how it operates to achieve the required growth to entice investors to make a financial
commitment. (Candice Landau et al., 2021)
Examine the benefits and risks associated with different sources of funding for new business ventures
When business-like Premium Contractors consider accessing a source of financing, they must consider
both the advantages and dangers connected with the various sources of funding. As previously stated,
much of the finance in a partnership will come from the owner's funds. This kind of financing has many
benefits and is accessed instantly. There is no need to wait for an application to be accepted, and the
firm will not be taking on any extra obligations. Not only will this investment be lost if this happens, but

if the company has unpaid liabilities, the owners will have to use their funds to pay these off, making it a
riskier investment on the owners' behalf. On the other hand, borrowing a loan from a financial
institution such as a bank may help the company. Loans can give Premium Contractors a cash boost
when needed while enabling development and growth in mortgages for new bigger premises and
offices. Nevertheless, these loans may be challenging to acquire, especially mortgages, as the company
must demonstrate that it will make regular repayments to the bank. As a result, banks raise their
interest rates substantially for riskier business endeavours, creating cash flow difficulties. Bank loans are
also a time-consuming procedure; thus, this funding source may stymie development ambitions,
resulting in lost chances. Investors are another critical source of funding for a startup company. The risk
may be distributed across numerous corporate organizations by the investors, thus reducing the risk.
However, investors may choose the company organization, which means the owners may lose some
control over the firm, which means the business may lose sight of its original objectives and ambitions,
which is the primary risk element of obtaining money from investors. (Wilson, 2012)