Music Store

Alex Almond

Contents page
Contents
Contents page ......................................................................................................................................... 2
Introduction to business ......................................................................................................................... 3
Format of the business ........................................................................................................................... 3
Aims and objectives ................................................................................................................................ 4
Market research ...................................................................................................................................... 5
Channel ................................................................................................................................................. 11
Finances and start up costs ................................................................................................................... 11
Sources of finance ................................................................................................................................. 13
Stakeholders ......................................................................................................................................... 13
Sources of advice and support .............................................................................................................. 14
Why my business will be successful...................................................................................................... 15
Summary ............................................................................................................................................... 17
References ............................................................................................................................................ 17

Introduction to business
The name of my business is called Music Store.
I will be selling musical instruments to people who are interested in music. The products that I will
be providing my customers will be musical instruments such as guitars, drums and pianos and other
types of musical instruments. I have chosen this type of business because there are a lot of people
who are interested in music and musical instruments are popular product for people to buy. I will
provide additional services. These are music lessons and musical instrument repair and guitar
restringing.
I will buy all of my products in because it will be hard to make instruments because I dont have the
suitable facilities to make the products. It will be easier and cost effective if I bought in the products
that I am going to sell.

Format of the business

There are four types of business ownership.
Sole Trader
A sole trader is owned by one person. They might have some employees but many wont have
employees.
The advantage of being a sole trader is that it is very easy to set up and you only need to register
with the tax office. Another advantage is that after you have paid all of the tax, all of the profits you
have made are yours to keep. Record keeping is simple because it is only you who is keeping the
accounts in order and why it is your own business and it is only you who is running the business you
can trade in your own name without any permission.
There are dis-advantages of being a sole trader. These can be if you are ill or you are on holiday. This
means that there is no income for the business which can result in not paying of any outstanding
bills to suppliers and you are also responsible for paying all of the debts. If you dont pay any of the
debt off you may be declared bankrupt. This is called unlimited liability. You also need business skills
so you know how run and set up the business.
Partnership
A partnership can be owned by 2 20m people. These all share responsibility for running the
business. The business should have a deed of partnership which is drafted. This will outline money
invested, decision making and what will happen if one of the partners leave the business.
The advantage of being in a partnership is that all of the partners can share their skills and ideas and
problems can be discussed and views can also be taken into account and the business can still
operate if one of the partners is ill or on holiday.
The dis-advantage of being in partnership is that partners may disagree and pull their weight. All of
the profits that are made must be shared, this could cause problems between the other partners in
the business and the partners may still have unlimited liability.
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LTD companies
A business that ends in LTD is a family run business. These businesses are registered with the
Companies House where each person invests money and receives shares. These companies now pay
corporation tax.
The advantages of being LTD Company are that the owners now have limited liability and this means
that they have invested money and the banks now let then lend more money.
The dis-advantages of being LTD Company is that it may be limited to the number of buyers and the
accounts need to be published through the companies house. Another dis advantage is that there
are specific legal requirements that need to be stuck to.
PLC companies
A PLC is a public company and it is the largest ownership type of business. All of the shares for the
business are sold on the stock market and this allows any body to buy shares into the business.
The advantage of being a PLC business is that the business has a greater access to the funds for the
business and the value of the shares can increase which will means that the increasing the value of
the business. The dividens that are made by the business they are paid to the shareholders.
Dis-advantages of being a PLC is that the accounts must be published for anyone to see and if the
shares fall in value the shareholders can then sell them reducing the value of the business and the
shareholders always need to be invited to an annual general meeting whenever there is one.
The type of ownership I am going to use for my business is a sole trader. I have decided to be a sole
trader because I am not going into partnership with anyone and the business is not a family run
business so it cant be called LTD nor can it be called a PLC because the business is not going sell any
shares and the business is not a large business.
The reason why I have decided to be a sole trader is that the funds for my business will be easy
access because its my own money so I can pay tax with the money I make and the rest which hasnt
gone into tax will be profit. I will also have complete control over my business and by making
decisions it will be quick and easy to set up the business and no one cannot have control over the
decisions I make.

Aims and objectives

The business aims are long term which is set by yourself where you would like to see your business
in 3-5 years.
Objectives are how you are going to achieve the aims.
The SMART targets are:
Specific, Measurable, Achievable, Realistic and Time.
The aims for my business is to maximise profits, survive by keeping the business running, breakeven
and increase market share.
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The objectives that I have chosen are specific and realistic.

I have chosen these SMART targets because I want to make more profit from selling my product,
increase the number of customers I am trying to sell the products too and I am marketing the
business so that it will attract people to buy products from the business. I have chosen these
because I want to make profits of 5,000- 10,000 and I want to get more customers and have more
materials. These are smart because I have to try and attract more people in to meet these goals.
These targets are SMART because I can get rid of the waste packaging by recycling it and I can have
materials for the shop such as fixtures and fittings and I can have people working for the business.
It is important to set aims and objectives for your business because it is good to see where you are
hopefully trying to see where your business is going in the future, such as getting larger by increasing
stock and maybe moving into larger premises so that I can have more products on offer for existing
customers and may be new customers who have never used the shop before..

Market research
Primary research is collecting original data such as questionnaires and secondary research is
collecting data which has already been done.
The different types of primary and secondary research are questionnaires, observations and
secondary research is research that has already been done.
The benefit of primary research is that it is relevant to the business and it is up to date and the disadvantage of primary research is that it is expensive to and you have to design it.
The benefit of secondary research is that it is cheap to use, quick and easy and the data has already
been collected. Although the dis-advantage of secondary research is that it may be out of date and is
it reliable and is it relevant to your business.

Secondary research
The information that I have found out about my competitors is that they are all local to my business
and they all have a website and some of them have a home delivery service. This wont benefit my
business because their home delivery service may be very successful and people use it because they
have used it since the business opened. The information that I have also found about my
competitors is that their prices are expensive which will benefit my business because I can sell my
products for less money which will attract more people in and the more people spending money the
more money my business will make.
My competitors are four local businesses which are Symphony music, Rimmers music, Forsyths
music and Music 90. They are all located in the Wigan town centre. The prices that they charge are
all different but the prices that they charge for their products are expensive.
On MINTEL I found out that inflation wasnt expected to fall as much in November and December.

This secondary research will allow me to know my business to be successful because people wont
be spending as much money if inflation has decreased. The secondary research will allow me to
make decisions for the products that is I sell and the services because I know who my competitors
are and what they are selling and the prices they are charging.

Primary research
For my market research I had a questionnaire for people to answer. The number of people I asked
was thirty and I issued them to people who played and didnt play an instrument and I asked people
if they would answer the questions.
The 30 people that I have asked to do my questionnaire are people who are interested or not
interested in music. I have asked them because I need to know if they would use a music shop.
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Do you play an instrument?

20

Number

15
10
5
0

Response

Yes

No

I ask the thirty people if they played an instrument. Out of the thirty people I asked twenty people said they
did play an instrument and the other ten people said they didnt. This means that the twenty people who play
an instrument would use the shop and this will make my business successful because the twenty people who
do play an instrument might buy products from the shop and they might recommend the shop to people who
they know.

How much would you pay for

an instrument?
Response

1000-2000+

Under 100500

10
Number

15

20

I asked the thirty people how much would they pay for an instrument. The majority of the nineteen people
who answered the question said that they would pay less than five hundred pound, and the other eleven said
that they would pay 1000 or over 2000. This means that I will have to sell the products at 100-500. This
will make my business successful because the customers dont want to pay a lot for the products. I am
charging the price that customers are willing to pay which means that I will sell more.

Number

Do you currently use a music

shop?
20
10
0
Yes

No

Response

The question that I asked them was do you currently use a music shop. The answer that I got was 20
people do and 10 people dont use a music shop. This means that the 20 people who I asked already
use a music shop somewhere else and this could make my business unsuccessful because they
already use other music shops and some of these shops could be my competitors. Therefore I will
have to try and attract them in to buy the products for example having offers on which will make my
business successful because I am attracting people into the shop to buy the products.

Number

How often would you visit a

music shop?
20
15
10
5
0
0-once a
month

2-5 visits a
month

5-8 visits a
month

Response

The question I asked the thirty people was how often you would use a music shop. The results that I
got were 18 for once a month, 8 for 2-5 visits a month and 4 for 5-8 visits a month. This means that
most of the people would only visit once a month. This will not make business successful because
there wont be enough income for the business. This also means that if the customers do visit once a
month I need to ensure they buy something and they return again in the future.

The question I asked the 30 people were what makes of instruments would you buy. The results
that I got from that was 16 people said that they would buy fender, 16 people said they would buy
Taylor, 18 people said they would buy Martin, 16 people said they would buy Roland, 10 people said
they would buy Yamaha and only 8 people said they would by Gibson. This means that I can sell the
well know products for as much as I can sell them for and this will be successful for my business
because I could get a lot of money coming into the business if I sell the well know makes of
instruments. This means I am going to sell Fender, Taylor, Martin and Roland which will mean that
my business will be successful because they are expensive which will mean that there will be a lot of
income coming into the business,.

How far would you travel to the

shop?
2 miles
5 miles

More than 5 miles

I asked the question how far you would travel to the shop and the results that I got were 17 for 2
miles, 12 for 5 miles and 1 for more than 5 miles. This means that most of my customers are local
people and this will make my business successful if there is a music which is local to them. This also
benefit my business because the shop is close to the train and bus station were people wont have to
walk to far to get to the shop.

The question that I asked the people would they like to play the instrument before they buy it all of
the people said yes. This means that they can play the instruments before they buy them so they can
see is they like it or not. This will make my business successful because people who play an
instrument know that they try the instrument before they buy it. This will mean that I will have
demo instruments available for people to play.

On the questionnaire I asked the 30 people the question what times they would go to the shop.
Sixteen out of the thirty people said they would go Monday to Friday at the times 9:00am 17:30pm
and 14 out of the thirty people said they would go to the shop on Saturday and Sunday at 9:00am
18:00pm. This means that I can have the shop open all week by opening the shop at 9:00am and
closing the shop at 17:30. This will be successful for my business because I can keep the shop open
at the same time from Monday to Sunday.

I asked the thirty people the question if they would use music lessons. Eighteen people said they
would use music lessons and 5 people said they would have guitar lessons, five said they would have
piano lessons, 6 people said they would have drum lessons and three people said they would have
lessons on other types of instruments. Out of the thirty people I asked twelve people said they
wouldnt use music lessons. This means that having music lessons will be a good idea because it will
make the business successful because it will create more money coming into the business.

If we had a website would you

order products from it?
25

Number

20
15
10
5

0
Yes

No
Response

I asked the thirty people if the business had a website would they order products from it. The
responses that I got from that were twenty one people said they would and nine people said they
wouldnt order products from the website. This means that having a website that will allow people
to order products from it can buy their products direct from us. This will be successful for the
business because it can generate more money coming into the business because most people would
rather buy of the internet than go to the shop.

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Analysis
The results that I gathered from my research twenty people said they do play an instrument and ten
said they dont play an instrument. This impacts my business in a positive way because there are
people who will use the shop.
With the responses that I have received I am going to have music lessons for those who want to
learn how to play an instrument. I am also going to have four brands for sale which I got the most
responses for. These brands are Fender, Taylor, Martin and Roland. I am also going to have a website
so people can order products and look what the shop has in stock.

Channel
My customers will buy my products online and in store
I have chosen these two methods because when I did my market research more people said that
they would use a music shop and they would buy the products online and in store.

Finances and start-up costs

Start-up costs
Start up costs

Costs

Deposit for rent

327

Till

70

Shelves

10,000

Materials

20,000

Furniture

3,500

Total

33,897

The cost of my start up costs will be 33,897. This is because the price of the rent is 327 per month
for a 14 year lease and the price includes all of the fixtures and fittings.

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Sales revenue
Product

Prices charged

Projected sales per

month

Sales income
Prices X number sold

Guitars

500

27

135,000

Pianos

500-1000

35

35,000

Drums

500-700

21

105,000

Brass instruments

300-400

19

7600

Other types of string

instruments

400-800

29

11,600

Keyboards

200-600

37

22,200

Total

443,800

Running costs
Description of
costs

How much will it be?

Rent

327 a month

Rates

4583

Electricity

250

Water

393

Phone/ internet

1000

Materials

15,000

Marketing and
research

25,000

Total

46,553

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The monthly costs for my business will be 327 a month for the rent of the premises and the price of
the rates is 4583. The cost of the water is 393 a year and the price of the electricity is 250. The
cost of the phone and internet is 1000. The total price of the materials in total is going to be
15,000 and the price of the marketing and research is 25,000. The total cost is 46,553.
I predict that I will be earning based on my selling price and predicted sales in total will be 443,800
per month.

Sources of finance
I will get the money for my start up costs from the bank so I can get my business started as quick as
possible so I can get people to buy the products that I am selling. one of the places where I can get
finance from is the bank and they will also give me advice on finance. I could also go onto websites
and read up about finance.
I have chosen this method because the banks will give me advice and support on how to pay for the
start up costs and they will tell me how long I will have to pay it back.

Stakeholders
There are seven stakeholders that I need to take in to consideration when I start up my business.
The first one is the owner these interests are the profits, good reputation and steady sales. This can
impact my business in a good way because if the business has a good reputation it will keep the
customers coming in buying the products and the business could make profits and this can result in
having steady sales. If I dont meet any of these the customers will stop coming and it will result in
the business not making enough money to keep on going and the business could go bankrupt.
The second stakeholder is the employees. These influence the working conditions, pay, working
hours and how long they are going to be employed for. This can impact my business in a good way
because if the working conditions are good I could the employees in a job and if I have any
employees working for me they would only be working part time. If I dont meet any of these
requirements people may not work for my business.
The third stakeholder is the customers. The customers require quality products, good service and
the prices they have to pay. If the products I sell are good quality it will meet the customer
requirements and it could make the customers come back and buy products from the business. If I
have a good service, such as a delivery service, and it is always on time they could buy the products
of line more often and it will generate more money coming into the business. If the prices I charge
are the prices that the customers are willing to pay, this will benefit my business because they could
spend more money and the business will make more income. If I dont meet any of these
requirements my business could go bankrupt.
The fourth stakeholders are the investors. The investors are the banks and they want their money
back in a reasonable amount of time and they dont want to have their money at risk. If their money
gets out a risk and they lose money they could possibly take things out of the business such as
products to pay for their lost money.
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The fifth stakeholder is the suppliers. If I buy any product from them I need to pay the bills of on
time but all depends on if I can make enough money to pay their bills of. I will also have long term
contracts with them so I will need to pay off my bills. If I dont meet any of these there is a
possibility that the business will lose all of the savings to the suppliers and the suppliers can take
anything out of my business that is worth money.
The sixth stakeholder is the local community. By opening my business I can make a creation of jobs
which will impact the community in a positive way because they can work and earn money. If I dont
employ any one out of the local community it will impact them in a negative way because they wont
be in a job and they wont be earning any money.
The seventh stakeholder is the government. If the business gets larger in the future I will have to
employ people and the employment level where the business is located is low. This will benefit the
business because I can have people working for the business. If I have people working for the
business and I pay them a wage I will have to pay tax and I will also have to pay tax for the business.
If I dont pay any tax I could lose the business.

Sources of advice and support

Most high street banks employ advisors to provide help and guidance for entrepreneurs. They also
offer advice on websites, run free courses and publish guides. The bank that I will use will be
NatWest because they seem to be the most reliable
There are four methods I will be using for my business. These methods are:
Finance- By having financial support for my business I can get advice from advisors which are
employed by the bank and I can even get advice on websites and I can go on courses to help me with
financial support. This will benefit my business because if get help on how to look after the finances
for the business I can pay for the bills from the suppliers and pay for the rent on the premises.
Start up capital.- this will help me with the cash flow and this money is needed to pay for initial
costs. There are options that I can take the main two are from family and friends or the loan can be
taken from the bank or grant for example the princes trust. If i decide to sell shares for my business I
can sell them to family and friends but if the prices of the shares fall they can resell them and the
business could lose money.
Further research on your chosen idea- The best source of is other businesses. Some businesses may
offer advice and information as long as you are not a direct competitor. To do this I cant go to my
local competitors I will have to go to other businesses to see how they advertise for their customers
but I can also go onto my competitors website to see how they advertise for their customers. This
will benefit my business because I can advertise in a similar way to they do and hopefully attract
some of their customers.
Independent advice- This advice is available and it can be free of charge and it can be found on
websites which have useful advice. This will benefit my business because I wont have to ask
advisors for advice.

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Why my business will be successful

My business will be successful because there is a gap in the market which means that there are not
as many businesses like mine around the area. There are only four businesses the same as mine in
the local area. I will also meet customer needs because I am selling products what the customers
want and the prices that they are willing to pay and the brands that they asked for when I did my
market research.
The market research that I did, all of the thirty people said that they would use the shop and they
would use a website to order products from it and they all had a price that they would pay for an
instrument. Most of the thirty people said that they would use music lessons. This will make my
business successful because I can give people music lessons by qualified music teachers.
The marketing that I will use will be a website and a sign outside of the shop so it will attract people
in to buy the products and they will also be able to order their products online. This will benefit my
business because I can make more money for the business if I can attract people to come in and buy
products and try to make them spend money.
Most of my customers buying my products play an instrument so the means the people buying my
products are people who are interested in music which will make my business successful because
most of them want the well known products which are high quality.
I will be different from my competitors because I will provide services such as an instrument service
for repairs and a guitar service which consists of restringing and repairs.
SWOT analysis

The strengths for my business are that I am

providing musical instruments and sheet music
to people who want to learn how to play an
instrument. I will also provide music lessons to
people who want to play an instrument. This will
benefit my business because it can make more
money.

The weaknesses for my business is that people

could go to other music shops such as my local
competitors and another weakness is that my
business is new which means that people may
not go to my shop because of other bigger
businesses.

The opportunities for my business are a website,

a YouTube channel to advertise the products and
a Facebook page to advertise new products.

The threats that my business could face is that

people could go to my competitors and if the
rate of inflation goes up this could be another
threat to my business because people wont be
buying as many instruments, and the number of
sales will decrease.

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My competitors are Symphony music, Rimmers music, Forsyths and Music90. I will beat them
because I will have a good customer service and this will make people come to my business because
I have the products on sale with what they want and the prices that they are willing to pay. The
customers will come to my business because I will have a better choice of products than my
competitors will have. This will benefit my business because it will make money if I can attract more
customers.
Resources needed
Resource

Where will it be obtained from

Guitars and other musical equipment such as

amplifiers and accessories.

http://intl.fender.com/en-GB/
http://www2.gibson.com/Gibson.aspx
http://www.taylorguitars.com/
http://www.martinguitar.com/
http://www.roland.co.uk
http://uk.yamaha.com/

Materials
Shelves for the products
Till

http://www.shopequip.co.uk/shelving+shelvesC48.html?gclid=CLH0q9_o_MICFVHItAodLA8AZw
http://www.staples.co.uk/cashregisters/cbc/88.html

Fixtures and fittings

http://www.ourproperty.co.uk

Legal aspects
The legal aspects that I will consider will be insurance because if anyone falls in the shop they will try
to put a claim in on the business and if I employ people to work for me I will have to pay them the
minimum wage and no less and the health and safety needs to be right because if it is not safe some
one could fall over if something is in the way and if they are disabled they could fall and a insurance
claim could be expensive pay off.

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Action plan
The bank loans have to be done before the shop opens and the premises need to be chosen so that
the business can run. The suppliers for the products will need to rung up so they what types of
business I am planning on setting up and see if they would start supplying me with the products. If I
decide to have staff I will need to advertise for staff in the local newspaper and employ them the
same time as the shop opens of after the shop has opened. All of the marketing for my business will
need to be done before the shop opens so that people can see what the the business is going to be
and the website will have to be done after the shop opens so that I know what is going to be on the
website. If the business has a YouTube channel and/or a Facebook page it can be done any time
after the shop has opened.

Summary
The reason why my business will succeed is because there is a lot of demand for musical
instruments because some people want to learn how to play an instrument and most people want
new and updated equipment. The business will also succeed because I am selling the products that
people have asked for and the prices that they are willing to pay and they all want the well know
products which are built to a very high standard. The majority of people who will use my music shop
will have music lessons and most of my customers will live in the Wigan area which will make my
business succeed because they dont want to travel too far and by having music lessons it will make
more money coming into the business. My business is in an area where people can access it very
easily. It has an easy access because it is next to the train station and the bus station. This means
that people dont have to walk too far and if I have staff working for me they can access the shop by
train or bus. My business will also succeed because there is a gap in the market which means that
there arent many shops in the area. The only local shops that are the same business is mine are four
small local businesses these are Symphony, Rimmers, Forsyths and Music90.

References
http://www.wigantoday.net/
http://www.uswitch.com/gas-electricity/guides/compare-electricity-prices/
http://www.uswitch.com/water/price-of-water/

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