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Business Idea and Its Fundamental Criteria Essay

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Introduction

A business idea should be viable and profitable by identifying a vibrant market to ensure that it receives the proper support. My business idea revolves around starting a dress shop to offer the latest, quality, and affordable formal dresses. An implementation of the concept will help me achieve my aspirations to become a successful entrepreneur. As a result, my business will operate within the apparel and fashion industry that is highly competitive due to low barriers of entry. The paper analyzes the business I would like to start, personal connection and possible information sources to use, market prices, and the product’s price elasticity of demand.

The Business I Want to Start and Why

I consider the idea of selling formal dresses viable and capable of offering returns to my investment, despite the existence of many firms that vend the same product in the market. The product will target women aged between 20 and 39 years as they have high purchasing power and prefer to look attractive in public, thus choosing to wear quality and glamorous clothes (Taylor, 2014). My business idea revolves around the anticipation that the current spread of COVID19 will decline following the effective vaccines to allow people to attend events, go for holidays and work from the offices. This will gradually increase the demand for dresses and encourage more new businesses to enter the market and capitalize on potential opportunities.

I want to start my dress shop to meet my dreams of becoming a successful businessperson and encourage other individuals to engage in self-employment to overcome joblessness. This will help create a better society and reduce the high poverty levels as people obtain reliable income streams through their businesses. I also want to start the business to offer trendy, unique, and affordable dresses to women to ensure that they look attractive in public. Lastly, I want to begin the business to take advantage of the numerous opportunities in the apparel and clothing industry, such as a large customer base and high demand for clothing.

My Personal Connection to the Business and Sources of Information

I have a high personal connection to this type of business because I feel happy when people dress well and appear to look neat in public. This is because appealing looks boost individuals’ confidence levels, making them willing to interact with others. Consequently, I am focused on offering the dresses at low prices to ensure that a significant fraction of the population can acquire the products to boost their perceived status and create a good impression. The key sources of information regarding this business that I plan to use for my SLP are journals, websites, and books. This provides crucial and trustworthy information that can help make the right decisions on starting the business to avoid a possible failure.

Prices Charged by Business in the Industry

The businesses in the market adopt varying price strategies based on the quality of products they offer and their objectives. The companies utilize online and brick-and-mortar presence to reach out to their customers. My hometown has an enormous presence of the country’s biggest clothing retailers providing numerous customer choices. The key businesses that operate and are easily accessible in my hometown and their prices for formal dresses are shown in the table below.

BusinessPriceType of Product Quality
Walmart$30Lower-end quality
Amazon$50Lower-end quality
Nordstrom$120High-end quality
H&M$40Lower-end quality
Macy’s$200High-end quality
Zappos$125High-end quality
Loft$100High-end quality
Target$30Lower-end quality
American Eagle$70Lower-end quality
Gap$45Lower-end quality

Factors Leading to the Large Range of Prices

There is an extensive price range that businesses are charging for dresses. Some companies choose to offer the product at high prices while others sell it at low prices. One of the fundamental factors leading to the price range is the product’s quality, where high quality leads to the adoption of premium prices. Additionally, the business’s location also affects the price of the dresses (Taylor, 2014). The businesses that offer the dresses through their online platform tend to be cheaper than those that use the brick-and-mortar presence due to low operation costs. Online companies do not pay for high license fees and rent, among others like the brick-and-mortar retailers. Lastly, companies that engage in increased advertising levels for their clothing end up adopting a high pricing strategy to offset the related costs and maximize profitability.

The Product’s Elasticity of Demand

From a critical perspective, my product will have an elastic demand. The number of dresses demanded alters by a more significant fraction as compared to the variations in price. The companies offering dresses at low prices appear to record high demand levels linked to those that adopt premium pricing strategies. A decision to increase the dresses’ price results in a demand decline, leading to low-profit levels. The easy availability of substitutes in the market forces the demand for dresses to be greatly sensitive to price fluctuations (Stengel, 2012). Additionally, the durability of dresses allows customers to be considerate of price changes as they can choose to make purchases in the future when prices are affordable and still use the attires that they possess.

Conclusion

A business idea should be feasible and profitable to generate good returns and evade a possible collapse. The business concept should also demonstrate a significant personal connection to ensure that it impacts customers and society tremendously. Before implementing the idea, an individual should identify the prices charged by the potential competitors to determine the best pricing strategy to adopt to maintain good demand levels. An analysis of the market prices will aid in determining the product’s elasticity of demand to comprehend the demand variations if the prices change.

References

Stengel, D. (2012). Flat World Education. Web.

Taylor, T. (2014). Principles of microeconomics. OpenStax. Web.

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IvyPanda. (2022) 'Business Idea and Its Fundamental Criteria'. 24 June.

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IvyPanda. 2022. "Business Idea and Its Fundamental Criteria." June 24, 2022. https://ivypanda.com/essays/business-idea-and-its-fundamental-criteria/.

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