Analysis of a Music Business

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Just like any other ventures, music business requires a lot of hard work and focus to make it profitable. Individuals in music business should have the key attributes of successful entrepreneurs including problem solving, analysis and decision making skills techniques. The paper focuses on a music business that is a sole proprietorship. The owner previously worked for another shop that sold musical instruments. However, the owner did not have any formal business trainings and had immediately left high school with few qualifications. In addition, the owner had limited knowledge of the internet although he had bought and sold items on e-bay occasionally. Moreover, the owner do not have experience in using social networking or other online channels and does little about advertising the business. However, he can play a variety of the instruments. The business is located in a town center where it has been trading for the last 7 years. The business is also a limited company and has employed 2-part time staff since it was opened. The business is involved in selling a range of instruments and offers repair services

Problem recognition

            The business has experienced a significant decline in sales over the last two years. Sales have reduced from $200, 000 per annum with a net profit of $40, 000 in 2015-2016 to forecast sales of $100, 000 and a net profit of $10, 000 in 2017-2018. The problem has been identified through taking several measures such as calculating the profitability of the business as well as the sales made. An accountant has been involved in identifying the existence of the problem. In addition, an external auditor had been contracted to assist clarify the problem and give directions on the way forward. After identifying the problem, defining it helps in establishing the goals, which for instance, the business aims at improving total sales and a rise in the profit margins. In addition, the business focuses on making a net profit of higher than $40, 000 that had been made in the financial year 2015-2016.

Screening the problem

            Screening of the problem involves further considering the existing challenge in depth. Screening involves use of SWOT analysis technique which involves analyzing the strengths, weaknesses, opportunities and threats of the business. The SWOT analysis helps to screen the problem through; building on strengths, minimizing weaknesses, seizing opportunities and counteracting threats. For example, an auditor would assist in identifying the performance and contribution made by the two employees of the company. In addition, conducting a SWOT analysis assists identifying possible threats and substitutes to the business (Cochrane, 2014). The key contributory factors to the decreased sales and revenue volumes have been due to existence of many competitors in the city offering lower prices. The identification of the existence of the problem has necessitated further research on the pricing strategies used by competitors. In addition, the company was identified not to have a website and there was no documented business plan. Another problem that was identified was the lack of training by the owner of the business. Lack of internet usage, social networking and advertising of the business were also identified to be major problems affecting business profitability.

Generating solutions

            Generating solutions involved brainstorming of ideas together with the accountant and fellow employees in the business. The ideas brainstormed included working on a pricing strategy that focuses on offering the best and most competitive prices in the industry. In addition, the business would focus on product diversification in order to increase the sales volume of the business. Moreover, it was agreed that the owner of the company would undergo training in music business to increase awareness and knowledge about the venture (Holland, & Light, 2017). The business would also invest in internet where buying and selling of musical instruments can occur online. Advertising of the business would also be made on the online platform. The owner and the employees would also be equipped with social networking techniques. A proper documented business plan would be established as well as developing a website.

Screening the solutions

            Screening of the possible solutions was done through a decision matrix which involved coming up with the pros and cons of each proposed solution. The pricing strategy which aimed at lowering the prices would result to an increased market share but was posed the disadvantage of reduced profit margins (Pinto, & Slevin, 2015). Experienced marketers were invited to offer trainings and advice on the best way to price. Developing a website for the business was also screened with great attention being on the advantages and disadvantages of developing it. Social networking was proposed as among the best strategies to adopt since it was less expensive and would provide the best marketing strategy. The business would also employer a qualified accountant to assist in book keeping

Implementation

            The implementation would be done through an action plan

STRATEGIC ACTION DESCRIPTION

PERSON RESPONSIBLE

DATE TO BEGIN

DATE DUE

DESIRED OUTCOME

Developing a business website

An Information Technology firm would be contracted to generate a website for the business

1st

Jan 2019

End of 2019-2020 financial period

A business website describing what the shop offers

Proper advertising strategy

The owner of the business would advertise in social and print media

1st

Jan 2019

End of 2019-2020 financial period

Creating awareness to customers and creating a competitive advantage

Social networking

The two employees in the business

1st

Jan 2019

End of 2019-2020 financial period

Advertising extensively on social media

Training the owner and employees

A qualified music industry firm would be contracted

1st

Jan 2019

End of 2019-2020 financial period

Attaining proper knowledge and skills in music business

Human resources to record accounts

The owner would recruit a qualified accountant and auditor

1st

Jan 2019

End of 2019-2020 financial period

Getting the best human capital in accounts to propel the business further

Review and evaluation

            Review and evaluation would be made on monthly basis to identify if the implementation is done as per suggested requirements. Monitoring would be done by the owner of the business. In addition, monthly calculations would be done by the accountant to determine if the targets of the business were being achieved. Self- evaluation would also be done on each employee and also the number of sales made each month.

Bibliography

Holland, C.P. and Light, B., 2017. A critical success factors model for ERP implementation. IEEE software, (3), pp.30-36.

Pinto, J.K. and Slevin, D.P., 2015. Critical factors in successful project implementation. IEEE transactions on engineering management, (1), pp.22-27.

Cochrane, T.D., 2014. Critical success factors for transforming pedagogy with mobile W eb 2.0. British Journal of Educational Technology, 45(1), pp.65-82.

October 05, 2023
Category:

Business

Subcategory:

Entrepreneurship

Subject area:

Business Analysis

Number of pages

4

Number of words

1079

Downloads:

32

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