Introduction
The world we live in is surrounded by electrical appliances and electronic devices that run on batteries. Hence, batteries are the primary basis for majority of these electronic as well as electrical devices. Moreover there are two different traits of batteries available in today’s market. The normal ones that are for one time use and the other are the rechargeable ones (Pillot, C., 2017, March). However, both these have specific lifetimes. The normal ones have a very shorter lifespan compared to their rechargeable counterparts. This report will discuss about a business plan for setting up a rechargeable battery business. In doing so, the report will discuss several aspects of the business plan and justify the idea for this business.
Main Body
Idea for the business and its justification:
Setting up a rechargeable battery business requires two basic elements namely technological expertise and a full proof business plan. Furthermore, it can be stated that for establishing a successful rechargeable business, it is important to hire a well-rounded backing workforce, developing a productive and efficient design, and devising efficient manufacturing operations and processes. Also, it is important to differentiate the business plan from other existing players in the industry. If these factors are taken care of, it is possible to establish a successful rechargeable battery business and acquire a major share of the existing battery market.
Latest market research reports suggest that a comprehensive analysis of the rechargeable battery markets in the US, Asia-Pacific, Japan, Middle East, Africa, Canada, Latin America and Europe predicts a steady growth (Blomgren, G. E., 2017). Furthermore, the report also suggests that by the year 2024 the market for rechargeable batteries will be booming. Details suggest that big and steady investments are being made by players all around the globe in the rechargeable battery business. To provide a detailed account of the market overview, it is important to take few important elements into consideration namely the present and future analysis, demographic trends, fast growing urban population which facilitates a growing environment for expansion of the market, the prosperous middle class population which presents massive opportunities, the sky-rocketing standards of living fuel, the significance of Lithium Ion batteries in future growth, etc.
It is important to understand the market for rechargeable batteries and why its demand is increasing with each passing day. Firstly, rechargeable batteries are the future. Consumers prefer rechargeable batteries over their standard counterparts because they account for less waste production and are friendly to the environment. Furthermore, the biggest advantage is that they can be reused a hundred of times simply through charging with a battery charger. Also, rechargeable batteries consume less energy as recharging them with a charger is a more energy efficient as well as cost effective process than producing a new one. These are the reasons consumers prefer rechargeable batteries over one-timers.
Business structure and its justification:
One important factor while establishing the business plan is outlining the structure of the business as well as the organisational structure. When it comes to the business structure, a company can choose from different options namely partnership, sole proprietorship, a corporation, S corporation, and a LLC corporation otherwise known as Limited Liability Corporation. However, it is important to identify the benefits and understand which business structure will suit the company for best. The chosen business structure will have its influence over day to day operations, revenues, manufacturing processes, profit margins, production, sales, etc. Thus, the choice of business structure will define the flow of business for the company and in turn determine its fate.
This business will be a private limited company. The major advantage of establishing the business structure as a private limited company is that the financial liability of the stakeholders will be limited to their respective shares (Narins, T. P., 2017). This way, if the business fails the stakeholders would be safe from losing their personal assets. Other advantages of establishing the business as a private limited company is that this way there will be better access to the capital. It will be a comparatively easy task to raise the share capital from new as well as the existing investors.
Business Model Canvas:
Business model canvas can be referred to as a business tool that is effective in panning out or visualising the different business processes which would work as the foundation of the business. It refers to all the fundamental building blocks that constitute a successful business (Paquin, R. L., 2016). Below is a diagrammatic representation or a sample template of a business model canvas:
Source: www.slideshare.net
The business model can vas comprises of nine elements. They are as follows:
- Customer Segments
- Value Propositions
- Distribution channels
- Customer relationship
- Revenue stream
- Key resources
- Key activities
- Key partnerships
- Cost structure
Each of these nine elements is significant towards planning a strategic business plan. All these elements influence a business and its processes (Paolone, F., 2015). In this segment of the report, we will discuss how these nine elements will help in setting up the business plan for the new rechargeable battery business.
Firstly, considering the given business idea of rechargeable batteries, the foremost thing to do is to outline the customer segments. For starting the new business, it is important to identify the target audience for the product (Namitulina, A., 2015). In this regard, it is important to mention that it is significant for the business to target the right set of audience for the product. Therefore, it is important to identify why people use or prefer rechargeable batteries over their standard counterparts. Thus, the prime factors which eventually led consumers to opt for rechargeable batteries are that it consumes less energy. Rechargeable batteries can be used over and over simply by charging them with a battery charger. This makes up for longevity and sustainable energy management. Less power consumption is one of the prime factors that create value of the product to the customers. Therefore, for setting up the business, it is important to understand that if the product or the brand is creating value for the customers and if so then how (Montemari, M., 2015). This way, it will be easier to identify the targeted audience as well.
The next element is value proposition. In this regard, it is important to understand that the company must establish value for delivering to the customers. The product being rechargeable batteries, it must be identified what values can be established and offered to the customers. In this regard, it can be stated that rechargeable batteries produces less waste as they can be used over longer periods of time rather than just one time use and then getting disposed. Thus they are friendly to the environment and can be regarded as safer. Being rechargeable, they can be used time and over and are worth the money. Thus they also establish value for money to the customers (Dzusova, S., 2015). Value proposition also makes up for the problems that can be solved by the product. The product being a rechargeable battery, it solves a major issue of reuse. Batteries are usually expensive and come with a short life span. Today’s world is literally dependent on electronic appliances. Our day to day lives are surrounded by these appliances of which the majority runs on batteries. Be it the smartphones we use or the television remote, everything runs on batteries. Thus it would be a major problem if customers have to change the batteries to these appliances every now and then. Therefore rechargeable batteries solve this longevity problem which is a major issue with batteries. This way the business will satisfy the needs of the day to day lives of the customers globally everywhere where there is need for batteries. Thus the product this business will produce is rechargeable battery which will satisfy the needs of customers for powering their electrical and electronic devices as well as appliances.
Next element is distribution channels. In this regard, it is important to understand the significance of distribution channels in any business. Distribution channels can be referred to as the bridge between the company and its customers. Only through distribution channels, a company supplies its product to the consumers. Thus for the business of rechargeable batteries it is important for the business to make sure that the distribution channels selected will serve the needs and requirements of the organisation and fulfil its business oriented goals and objectives. Also, it is important to make sure that the distribution channels are efficient enough to supply products to the targeted markets so that it reaches the consumers. Therefore the distribution channel for the new rechargeable battery business must be selling directly to the retailers and whole-sellers. This way, the product will have a wider diversity in the market and customers will have easy access to these batteries (Joyce, A., 2016).
While it comes to customer relationship, it can be stated that this element has a lot of influence over the brand or the product. The company must make sure that its relation with the customers is a fulfilling one. Therefore, it must be outlined beforehand that what a customer expects from the product. Therefore, based on the expectations of the customer the product design must be finalised. In case of rechargeable batteries it is necessary to identify the expected lifespan of the battery or the energy consumption of the battery. What are the customer’s thoughts and needs based on these factors? Also, after the product is supplied, it is important to take feedbacks on the performance issues of the battery so that it can be made sure that they are up to the mark and fulfilling enough for the customers. This way the company can establish a good relationship with the customers and they can be retained. Also, if the feedback is not up to the mark, then the product design can be further modified in order to meet the needs of the customer. This will help facilitate the fulfilling relationship between the company and the customers.