In today’s economic society creating and investing time and money into a new business is very risky to say the least. A couple of things to look at are market structure and elasticity of the product or service. In this business plan I have decided to create a business that surrounds a service versus a product, the service that I plan on providing is a personal advocate to nursing and rehab facility residents. The service will include being a personal confidant to the resident and family as well as a medical advocate to the family.
The market structure for this type of business in a Pure Monopoly due ...view middle of the document...
One good thing that will work in my favor is that I am not worried about changes in quantity as a result in pricing decisions that may affect my marginal cost and revenue. Offering a service such as this will not have to figure in quantity of goods provided as much as how many clients that I can take on at one time and still be productive and provide the highest level support as possible. Where quantity may not be issue productivity will be a definite possibility, if I accidently take on more work than I can handle I will have to do one of two things. Either turn clients away or hire more help and that could definitely hurt profits.
Pricing is a major aspect of bringing in potential business in the form of clients, some nonpricing that I plan on putting into place would be providing some services at no charge such as educational material on the different rights that the resident has when admitted to a facility. Providing educational material at no cost is a benefit to the resident because they will be able to better understand what they can expect the outcome may be if a problem or issue needs to be reported and followed up on. Providing services on a more personal level will assist me on gaining entry into the market because the only competition at this point in time is the ombudsman and they are stretched thin because they have to handle a large area and cannot regulate how many concerns or issue that they have to address and that may reduce the level of personal attention they are able to give.
The only change in my business operations that would alter the mix of my fixed and variable costs in line with my initial strategy would be if I end up with more business than I can handle and I am forced to hire help in order to take on the extra business. If I am forced to that than my costs will be affected because I will be forced to pay an employee a salary that will cut into my overall profits.
Currently the global economic conditions are slowly improving but remain vulnerable to old and new issues that will arise as the year progresses. The DESA issued a report stating that the global economic growth is forecasted to accelerate from a sluggish 2.1 per cent in 2013 to 3.0 per cent in 2014 and 3.3 per cent in 2015. The report warns of the risks associated with the upcoming unwinding of quantitative easing programs in major developed economies. AS anywhere else in the world the global conditions will affect the local conditions just as it would the larger conditions. Since the market is making a return although it is sluggish this should in turn assist me in my business endeavors. My proposal does not rely as heavily on the economic conditions as other businesses may due to the fact that I am a very small business owner and do not have any employees to worry about at the moment. The service that I am attempting to provide is not something that the rehab residents can afford to go without and the fact that I am in business for myself I can...