Introduction

Telarny wants to start her own jewellery store and Nairi wants to
establish her own restaurant/lunch bar business. They both have desire to
start a small business but it is only the first step in forming one. They also
need money, people who can help them with their businesses and other
materials to get the business running. The main problems likely to be
faced by Telarny when starting her business will be discussed first and
then the key actions she has to take to get her business off the ground
will be suggested. The main problems that are likely to be faced by Nairi
will be discussed after and key actions she has to take to get her business
of the ground will be suggested also. After that, an assessment of their
business prospects will be compared and the chances of them to be
succeed or experience difficulties will be explained.

Main problems likely to be faced by Telarny

Telarny’s main problems when it comes to starting her own jewellery

store are lack of the four production factors1, and that she does not
possess any formal training or working experiences related to the
jewellery and gemstones business. Her shy personality will also add to the
difficulty of starting her own business.

Telarny has an uncle in Sri-Lanka who is a gem merchant and has agreed
to assist her to import precious stones. It is unknown of how her uncle will
help her but assuming he can help her gather information of importing
precious stones to Australia and even find a source at which a discount
rate can be offered, that will become a big advantage to Telarny as the
costs of her products will be relatively low comparing to other existing
gemstone businesses. However, her only financial resources are $1200 in
a building society and even with the help of her uncle, she will find it very
hard to find an affordable rental premises for her jewellery store. Hiring

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Choo, Dr. S, 2006 “Introduction to Entrepreneurship” Tilde University Press, Victoria Pg.
30
staffs for assistance in the store at the beginning will almost be impossible
as well due to limited funds.

The lack of formal training and working experiences related to the

jewellery business is another issue here. Assuming Telarny did not do any
market research for the jewellery industry, and without the working
experience gained from working for a jeweller, she will not be familiar with
the different kinds of demand in the jewellery market. She will not know
what kind of customers she wants or needs to be targeting at, what type
of products they will more likely to be attracted to. She will also be
clueless on the local and international competition that she will be facing.
It is very risky to start a business without specific knowledge of the
industry.2 The case has mentioned that Telarny’s knowledge of precious
stones and jewels is good but it is a very subjective comment. Formal
training will be needed to prevent her from buying bad quality or fake
gem stones from suppliers and can provide her important knowledge,
such as how to handle the stones so they will stay in a good condition for
a long period of time.

Her shy personality will add another barrier on starting her own business
and that may be why she couldn’t form any payment agreements or credit
terms with the jewellers who are interested in her supply samples, as she
is lacking on communication and negotiation skills.3

Key actions for Telarny to get her business off the ground

First and foremost, I strongly suggest Telarny to undertake formal

training on precious stones and jewels, as it will assist in preventing her
from buying bad quality or fake jewels from dishonest suppliers and thus
avoid creating a bad reputation for the business. The formal training can
also help Telarny offers better customer service, as she will be able to
answer specific questions related to gems and handle jewels in a
professional manner.

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Choo, Dr. S, 2006 “The Entrepreneur” Tilde University Press, Victoria Pg. 33
3
Choo, Dr. S, 2006 “The Entrepreneur” Tilde University Press, Victoria Pg. 33
 Secondly, Telarny should consider finding a part time job in the jewellery
industry while getting the formal training even though she is not
interested in working for someone else. Working as a casual in a jewellery
store can help her to get familiar with the industry so she knows how
jewellery businesses operate, what kind of customers that she will be
getting, how to meet their needs with her products and skills.4 It will also
allow her to keep in touch with the latest fashion trend in jewels and
gather information of her future competitors. Furthermore, the work
experiences that she gets from the part time job will shape up her
personality for the industry. It will be wise if she puts in efforts to build up
connections and relationships with experienced people from the
workplace that are experts in gem stones as well. She can learn a great
amount of useful information from them to help start her own business.
Telarny will most likely find these information, experiences and relations
to be very useful later on when she finally gets all the resources she
needs for starting her own business.5

Having a part time job allows Telarny to save money for her future
jewellery store. At the moment, it is extremely difficult for her to start her
own business with just $1200 in a building society. She will also find it
hard to borrow from a financial institution if she is just a 19 years old
without any personal property or past successful experience of starting
her own business. Borrowing from family or relatives is another option for
funding but it is not suggested due to the risk involved. After all, it is a
bad idea to get into a huge debt at the start of the business especially if
the return of profit is highly uncertain.

All-in-all, my recommendation for Telarny is to get a part time job at a

jewellery business while getting her formal training at a professional
jewellery school so she can gain the knowledge and money that she will
need for her career. When she has the sufficient amount of money and

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Choo, Dr. S, 2006 “Generating a Business idea” Tilde University Press, Victoria Pg. 53
5
Choo, Dr. S, 2006 “The Entrepreneur” Tilde University Press, Victoria Pg. 31
knowledge, a proper business plan will also be needed in order to start her
own business.

Main problems likely to be faced by Nairi

Nairi had worked in restaurants and had successfully managed several

for other people and thus the lack of experience of the industry is not a
big issue in her case. She however, does not have all four production
factors for starting her own restaurant. There is also no formal planning
for the start of her business and she may not have the proper personal
characteristics and attitudes for being an entrepreneur. 6

Nairi obviously does not have enough financial capital for her to start her
own restaurant, and so she cannot afford to hire workers or to find the
best premise in the best location for her business. The lack of financial
capital and formal planning both contribute to her being indecisive and
switching her idea from opening a restaurant to a lunch bar, and then to
establishing a car cleaning and detailing business.

Negative attitudes towards professionals will prevent Nairi from

generating professional opinions and suggestions and therefore, she may
miss out on good recommendations on how to start her own business.

Key actions for Nairi to get her business off the ground

Nairi has past experiences of managing restaurants successfully and a

reasonable amount of financial capital ($30,000) to start a small
restaurant/lunch bar. If the amount is insufficient because she does not
wish to rent premises to start her business, she has a choice of running a
car cleaning and detailing business first in order to save for her goal.
Therefore, the most important thing that Nairi has to do in order to make
her dream come true is to produce a formal business plan. 7,8
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Choo, Dr. S, 2006 “The Entrepreneur” Tilde University Press, Victoria Pg. 31
7
Choo, Dr. S, 2006 “Generating a Business idea” Tilde University Press, Victoria Pg. 53
8
Choo, Dr. S, 2006 “The Business Plan” Tilde University Press, Victoria Pg. 117
 Starting with a mission statement which expresses Nairi’s vision, she
will need to decide the core value of her restaurant such as the type of
food and service it provides and the type of customers that she wants to
focus on. The percentage of return on her capital can also be listed here
as a target for the business. She will then need to decide the market
opportunity which requires her to do market research of the industry.
The overview of market segment she plans to operate in has to be set out
in details including information like the market size, profitability, growth
trends and government regulation. She will find the SWOT analysis - a
useful market research tool for evaluating the Strengths, Weaknesses,
Opportunities and Threats of her competitors in the area she wishes to
start her business at. The SWOT analysis can then help her set goals of
what her business wants to achieve in the future in order to meets its
objectives. 9

After the market opportunity is being formed, the market and

business strategy based on Nairi’s market research is what needs to be
done next. She will have to find the key success factors of the business
which can be derived from a SWOT analysis. Her strengths need to be
built on and weaknesses have to be overcome in order to take advantage
of the opportunities and resist the threats. This can be done by finding her
unique selling proposition (USP).10 It is especially important in an already
saturated market like the one Nairi wishes to enter into. A USP can
differentiate the products and services Nairi’s restaurant is going to
provide from other restaurants which offer similar kinds of service. Target
markets need to be identified for which the strengths and USP can be best
targeted towards. It is better for Nairi to start with just one/two target
markets at the start of her business. That will make it easier for her to do
market research on the customer profile in the targeted markets in order
to find out why and what customers buy based on, for example, their
lifestyle. She will also need to set out the product/service description

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Choo, Dr. S, 2006 “The Business Plan” Tilde University Press, Victoria Pg. 121
10
Interactive Marketing 2010
of her restaurant. The legal protection status has to be stated in this
section which includes patents, copyrights, trademarks and secrets (e.g.
Nairi’s secret cooking recipe). The production process and the sources of
supply of the food in the restaurants will need to be listed as well as the
environmental issues and their resolution. The most important part under
this section is how customers will benefits from choosing to dine in Nairi’s
restaurant.

The last part of the business plan is to list out the executive team and
board (which is the management team for Nairi’s small restaurant),
operations, financial projections and investment proposal.11 This
will describe who will be running the restaurant, how it will be operated,
the distribution of profit and loss, analysis of the business financial
position, valuation of the business, ownership arrangement and
information for potential investors. This part of the business plan requires
professional knowledge and opinions from professionals like accountants
and lawyers. The negative attitudes Nairi holds for them will cause great
difficulties and inaccuracy for this part of the business planning. One
important characteristic to be a successful entrepreneur is to be open and
broad minded to take into account others’ opinions and suggestions. Nairi
may find the cost of legal advice expensive in the beginning, but when the
business is managed well and runs smoothly while all legal advice is
followed; it will prohibit extra legal infringements from occurring. She will
also find the cost of seeking legal advice covered soon enough by the
profit generated from her well managed restaurant.

Once a formal business plan has been created, Nairi will find herself half
way through achieving her dream of opening her own restaurant because
she will then have a clear figure of how much she needs to establish her
own business. She can go ahead and decide wether to open a lunch bar or
save for a period of time while operating her car cleaning and detailing
business. If she decides to open a lunch bar then she will know exactly
what kind of customer and market she wants to target at and what kind of

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Choo, Dr. S, 2006 “The Business Plan” Tilde University Press, Victoria Pg. 127
business and market strategy is needed in order to achieve her business
objectives. If she decided to start a car cleaning and detailing business in
order to save enough to open a restaurant, then she will have a clear idea
of how much she will need to save and how long she will have to work in
order to achieve her goal to be a restaurant owner.

Comparison of the two business prospects

Telarny is a teenager that has just graduated from high school recently.
She has a passion and good knowledge of precious gem stones and hopes
to open her own jewellery shop. However, with no working experience in
that area of the business and the lack of formal training and financial
capital, the prospects to achieve her goal look extremely difficult. It is
possible however, although very difficult and unlikely, for her to get a loan
from financial institutions or relatives to start her business, and even if
she did get the loan, her business would very likely fail due to her lack of
experience or a plan for the businesses present and future position. The
best recommendation for Telarny is to get formal training for precious
gems and jewels while working part time in a jewellery shop12 (which not
only helps increase her experience in the industry, but can also shape her
personality to be prepared for her future career) or if possible, she can try
starting her own online store selling jewellery of her own design with
gems she gets at a discount rate from her uncle. This way, not only can
she earn income from selling jewellery online, but if the online store
becomes successful and popular, customer loyalty and reputation of her
jewellery will already be established and this can assist Telarny when she
attempts to start her own business later on.

Nairi wants to open her own restaurant but unlike Telarny, she has past
successful experience on managing staff in restaurants and so she has a
general idea of what is required to work in the restaurant industry and
what can be expected once the business starts running. Lacking sufficient
financial capital causes her to switch from wanting a restaurant to
opening a lunch bar and at the end, she decided to start a car cleaning
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Choo, Dr. S, 2006 “Generating a Business idea” Tilde University Press, Victoria Pg. 55
and detailing business so that she can save up to establish her own
business. It is a good idea to save but what she really needs is a formal
business plan. By producing one, she will be more determined to stick to
her goal which is to open a restaurant of her own. All uncertain elements
of opening a restaurant will be calculated and assessed while forming the
business plan as research will need to be done on all aspects of opening a
restaurant. Questions related to her business that occur such as what
kind of customers she wants to focus on, how to make her own business
unique and better than potential competitors, what type of image she
wants to create for her restaurant, will be answered once the formal
business plan is done.13 She will also know how much she will need to
save in order to achieve her dream and what kind of business and market
strategy her business will need to adopt in order to achieve its objectives
in the future. A business plan can also prevent her from changing her
ideas constantly. It can be costly but getting advice from professionals is
important and thus, in order to be a successful entrepreneur, Nairi should
change her negative attitude on accountants and lawyers as their services
could possibly prevent her from facing legal infringements in future (which
is very likely to cost far more than the original cost of the legal fees) from
her business failing to follow legal regulations. Therefore, the best
recommendation for Nairi to make her dream come true is to get a formal
business plan done with the help of professionals. Once the business plan
has been produced, she will know how much she will need to save and
how long it will take her to save that amount of money to start her own
business. The business plan will also act as a guideline on how to run her
enterprise in order to achieve the objectives she has set for her
restaurant.

To conclude, having the desire and passion to start a business is the first
step of becoming a successful entrepreneur. Having experiences related
to the specific industry and a formal business plan are what help a
business start successfully. The business plan needs to be well thought
out; and in depth business and market research and professional advice
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Choo, Dr. S, 2006 “The Business Plan” Tilde University Press, Victoria Pg. 121
are required so that the business plan produced is accurate and reliable.
An out-going personality and an open mind to listen to advice, suggestion
and ideas are also essential for an entrepreneur to become more
innovative.14 Last but not least, one shall not give up on their life goals
easily. A strong will and a well constructed business plan can eliminate all
barriers to establish a new business, and fulfil its aim to provide good
quality products and services to help shape a community with higher
living standards.

Reference List

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Press, Victoria

Drucket P.F. 1985 Innovation and Entrepreneurship,2nd Rev Edn, Clays

Limited, Great Britain

14
Choo, Dr. S, 2006 “The Entrepreneur” Tilde University Press, Victoria Pg. 33
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Koehler Publishers, San Francisco

Bartol, Tein, Matthews, Sharma, Ritson & Scott-Ladd, 2009, 2nd Edn,
McGraw Hill, New South Wales

Interactive Marketing 2010, How to create your unique selling proposition

that makes you generate more results. Available from:
<http://www.interactivemarketinginc.com/unique-selling-
proposition.html>. [11 April 2010].

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Baden-Fuller, CWF & Stopford J, 1994, “Creating Corporate

Entrepreneurship” Strategic Management Journal, Vol. 15 Issue 2, pp. 521-
536

Whitford, D. 2010 “Can You Learn To Be An Entrepreneur?” Fortune

International (Europe) 3/22/2010, Vol. 161 Issue 4, pp. 35-37

D’Amboise G & Muldowney M, 1988, “Management Theory for Small

Business: Attempts and Requirements” The Academy of Management
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Khan, A.M & Manopichetwattana V, 1989, “Innovative and Noninnovative

Small Firms: Types and Characteristics” Management Science, Vol. 35, No.
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Unknown, 2010, “5 fledgling entrepreneurs put their plans into action”

The Business Journey Begins, USA Today 02/01/2010