Exit Strategy And Entrepreneurship

Exit strategy

Discuss about the Exit strategy and  Entrepreneurship.

The business will be regarding the cleaning services where the customers will be booking the service through their mobile phones. The performance of the business will be depending on the level of services that will be provided by the company. It will depend on the customers who will be booking the services at a faster rate so that the company can perform in a better manner in the Singaporean market (DiTienne, McKelvie & Chandler, 2015).

If the company cannot perform in a proper manner in the market, the company will have to exit so that it does not suffer any losses. There are several exit strategies that can be taken up by the company such as the process of liquidation, acquisition, Initial Public Offering (IPO) and buyout by the management. The acquisition process is where the company will be taken over by another services organization so that it can perform under them. This can be done when the buyer company has a good presence in the market and can market the services of the newly acquired company as well. The process of IPO may not be used by the company, as it does not have any franchises and are not listed in the Stick Exchange of the country, since it is a start-up company (Wennberg & DeTienne, 2014).

The other exit strategy that the company may consider is the buyout process by the management. This can be done when the employees have a better knowledge of the culture that is being followed within the organization. The goals of the company also needs to be taken in to account so that it can result in the employees seeking a stake in the company. The process of liquidation is that the company needs to sell off its assets so that the banks can be able to recover the loans that has been taken up for setting up of the business organization. This will also help the company in terminating the services of the organization and shutting down of the business completely (Prajogo, 2016).

The company will follow the liquidation process as an exit strategy since it is a newly formed company. If the company does not perform in a proper manner in the market, it has to liquidate its services in the market. The company has to sell off its assets so that the money can be recovered, which will help the company in paying the loans of the bank. The rest of the money that will be left to the company will be given as salaries to the employees and the money will be divided among the founders in their ration of sharing the profit (Schoenberg, Collier & Bowman, 2013).

Operational overview

The company will take in to consideration a loss of 5 percent in the first year of its operations, which has been written down under the contingency plan in the books of the company. This would allow the company in studying the market in a proper manner, as it is a new company and there are many competitors in the Singaporean market.

The business cannot be transferred to another company, since it is a new company and the shares of the company are all under the partners. During the time of liquidation, the company will pay off the debts and the remaining amount that will be left after realizing the assets will be distributed under the profit sharing ratio of the partners (Kotabe & Helsen, 2014).

The company will be located in Singapore and the advantage is that the cost of labour is very cheap, as the economy is developing in nature. The rate of taxes in the country is also flexible and the company has to make a profit of above $30,000 so that they are eligible to pay the taxes. This results in less pressure on the new companies, as they do not need to pay the taxes and invest the amount in their business as well (Boons et al., 2013).

The disadvantage among the labour force is that it is restricted and most of the people are not willing to work in a low-tier position. This is due to the fact that the remuneration that will be provide by the company will be very less and will not sustain their livelihoods.

The cost of the materials are not high, as the country allows the formation of new companies so that the economy of the country can improve as well. The raw materials that the company will need are available with the contractors at a lower price so that the business can earn profits at an early stage of its operation (Zikmund et al., 2013).

The company will be hiring a place so that it can help in setting the business in a proper manner. The place will be rented, as the expense that will be required will be less so that the products that will be necessary in providing the services can be purchased in a larger amount. The requirements of the business can be purchased with respect to the sales that has been estimated in the financial statements (Caro & Martinez-de-Albeniz, 2015).

Summary Statement

The services that will be provided by the company will be done with the help of the necessary equipment so that the process can be efficient in nature. It will also allow the company in increasing the level of efficiency of the company based on the latest technologies that they will adopt within the company (Suriadi et al., 2014).

The fixed and variable cost of the company has to be incurred so that it can help them in increasing their level of efficiency in the market. It will allow the company in gaining a competitive advantage in the market so that the work can be done efficiently.

 
The labour force that will be hired for the organization will be trained by conducting workshops so that it can result in increasing the level of efficiency of the workers as well. The management of the company will make it a point to understand the needs of the customers so that proper training can be provided to the employees (Caro & Martinez-de-Albeniz, 2015). The training procedure will be done in pairs so that the employees can complement each other and help in assisting each other when they are not capable of doing it. A checklist will be prepared so that it can allow the company in understanding the level of training that has been successfully imparted to the employees. This will result in increasing the knowledge of the customers regarding the cleaning services that the organization expects from them (Sharda, Delen & Turban, 2013).

A simulation process will be used in company so that the training can be imparted to the employees in an effective manner. The employees will be given a time frame where they will practice their procedures so that it can help them in increasing their level of efficiency. The employees will also be provide with feedback forms so that the knowledge of the employees can be taken in to consideration as well and the training process can be made efficient (Suriadi et al., 2014).

Reference List

Boons, F., Montalvo, C., Quist, J., & Wagner, M. (2013). Sustainable innovation, business models and economic performance: an overview. Journal of Cleaner Production, 45, 1-8.

Caro, F., & Martínez-de-Albéniz, V. (2015). Fast fashion: business model overview and research opportunities. In Retail supply chain management (pp. 237-264). Springer, Boston, MA.

DeTienne, D. R., McKelvie, A., & Chandler, G. N. (2015). Making sense of entrepreneurial exit strategies: A typology and test. Journal of Business Venturing, 30(2), 255-272.

Kotabe, M., & Helsen, K. (2014). Global marketing management.

Prajogo, D. I. (2016). The strategic fit between innovation strategies and business environment in delivering business performance. International Journal of Production Economics, 171, 241-249.

Schoenberg, R., Collier, N., & Bowman, C. (2013). Strategies for business turnaround and recovery: a review and synthesis. European Business Review, 25(3), 243-262.

Sharda, R., Delen, D., & Turban, E. (2013). Business intelligence: a managerial perspective on analytics. Prentice Hall Press.

Suriadi, S., Weiß, B., Winkelmann, A., ter Hofstede, A. H., Adams, M., Conforti, R., … & Pika, A. (2014). Current research in risk-aware business process management: overview, comparison, and gap analysis. Communications of the Association for Information Systems, 34(1), 933-984.

Wennberg, K., & DeTienne, D. R. (2014). What do we really mean when we talk about ‘exit’? A critical review of research on entrepreneurial exit. International Small Business Journal, 32(1), 4-16.

Zikmund, W. G., Babin, B. J., Carr, J. C., & Griffin, M. (2013). Business research methods. Cengage Learning.

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