Introduction to Business Venture
Discuss about the Business Venture for Saygin Yalcin.
The success of the innovative and creative business idea is largely influenced by the business venture selected particular entrepreneur. As commented by Drucker (2014), the concept of business venture highlights the start-up entity developed with the intention of incurring financial profitability. Conducting business in the same country results in market saturation, as a similar type of business organization seems to rise over the longer period. Thus, the business organizations opt for business ventures that provide them with the opportunity of invading new market thereby, ensuring profit maximization. The majority of the business ventures are created by considering the demand of the market. In other words, lack of supply in the market facilitates business ventures (Brenkert, 2017). The concept of entrepreneurial business venture highlights that the individual is responsible for the business idea, planning along with potential risks in the process of business venture. In the case of the entrepreneurial business venture, the venture includes new product rather than considering the existing business model.
This report highlights the business venture for Saygin Yalcin the German entrepreneur and businessperson. Saygin Yalcin created a website that provides an opportunity for people to sell their cars in just 30 minutes. The idea proposed by Saygin Yalcin is unique and creative, as selling cars in just 30 minutes was next to impossible. Post the launch of the website, the idea has been widely recognized and accepted and the YouTube channel of the entrepreneur has an estimated 200,000 viewers. After being accepted widely, Saygin Yalcin aims towards undertaking suitable business ventures for expanding the business in German market by reviewing the capital sources and methods of obtaining them along with challenges and difficulties of the selected venture and the risk that is involved.
Having adequate finance is of utmost significance for new business ventures. As commented by Grilli & Murtinu (2014), it is important for the new business ventures to collect adequate funds and resources for establishing and conducting the business successfully. In the case of Saygin Yalcin, the entrepreneur idea also needs adequate capital sources for the new venture he is planning to do in Germany. The different capital sources for the new ventures are a personal investment, venture capital, angels, business incubators and government grants and subsidies.
While starting a new venture, the individual doing the new venture should be the first investor. As commented by Bruton et al., (2015), the individual starting the new venture needs to use their own cash or use existing assets. This provides an opportunity for the individual to prove to the bank that the individual has a long-term commitment to the project. In addition to, this also highlights that the individual is ready to take risks. In this case, Saygin Yalcin can be the main capital source for the new business venture. This will help in ensuring that he has a long-term commitment and is also ready to take risks in terms of the new venture.
Saygin Yalcin's Unique Business Idea
Venture capital is also a vital source of capital that can be used for new ventures but it cannot be used for all the budding entrepreneurs. As mentioned by Bertoni, Colombo & Grilli (2013), the concept of venture capital highlights the interest of the venture capitalists for a business that is technology-driven. This indicates a high growth rate of the business in the coming years. In this case, Saygin Yalcin can use venture capital as the capital source, as the new business idea is highly technology-based and provides an opportunity to sell cars in just 30 minutes. On the other hand, angels can also act as a source of the capital source. According to Petkova, Rindova & Gupta (2013), angels are wealthy and retired individuals that aim towards investing in smaller firms that are owned by other individuals. As a result, the investors can share their experience and skills in making the business successful. However, angels tend to invest early stages of the business. Apart from the sharing their own experience in the business, the angels also provide their industry contacts to the new entrepreneur business. As a result, the new business venture tends to flourish in no time and gain recognition within the industry sector. In this case, Saygin Yalcin can use angels as the source of capital for the entrepreneurship, as this will provide an opportunity to take support from the experienced and retired executives of the company and expand the business idea.
Business incubators are another type of capital sources of new business venture that emphasizes on the high-tech sector and provide economic support at every stage of developing the business (Mohammed & Obeleagu-Nzelibe, 2014). In the case of business incubators, they invite the future business and entrepreneurs in order to share their logistical, technical and administrative resources. However, the business incubators tend to leave the entrepreneurs once the new business idea enters the market successfully and look for new entrepreneurs (Cooce, Marti & Murtinu, 2013). In this case, Saygin Yalcin can use business incubators as the source of capital for the new business idea, as this will help in getting support in terms of logistical, technical and administrative resources and adequate support at every stage.
The government can also act as a major source of capital for the budding entrepreneurs and their new business ideas. As mentioned by Robb and Robinson (2014), the government bodies provide grants and subsidies applicable to the particular business type of the respective entrepreneur. However, it is difficult to get grants and subsidies from the government. The entrepreneur and the new business idea have to fulfill some criteria in order to get the government grant. The entrepreneurs need to provide a detailed description of the project that explains the benefits of the project along with the detailed budget (Cumming & Johan, 2013). In addition to, it needs to contain experience and the background of the managers. The new business idea is judged based on the significance, approach, innovation and assessment of expertise thereby, assessing the need for the grant (Rossi, 2014). Saygin Yalcin can get government grant or subsidy as the new business idea proposed by him has importance, approach and innovations that aim towards helping the target customers by allowing them to sell their cars in just 30 minutes.
Capital Sources for New Business Ventures
Business ventures are considered as new business ideas that promote new business ideas for the target market by considering their needs and demands. The different forms of business structures for the business ventures include sole proprietorship, general partnership, limited partnership, limited liability partnership, corporation and nonprofit corporation. As commented by Macht & Weatherston (2014), the concept of sole proprietorship highlights a single owner for the business. It is one of the most common business structures for business ventures, as it is simple to operate, provides greater flexibility and incurs less tax. However, the business owner is completely liable for the debts. On the other hand, the concept of general partnership highlights collaboration of two or more individuals as the owners of the business. All the partners of the business contribute money, skills and labor for the business (Morris, Shirokova & Shatalov, 2013). Thus, each of the partners has to share profit and loss and are personally liable for the debts the business incurs in due time.
In the case of a limited partnership, one or more than one general or limited partners form this partnership. The general partners have equal shares in terms of profit and loss of the business whereas the limited partners have equal shares in terms of profit but losses are restricted to their extent of investment. Additionally, limited partners have restricted involvement in the business venture (Beamish, 2013).
Based on the various types of business ventures, the most appropriate method of a business venture for Saygin Yalcin is the sole proprietorship.
The PESTLE analysis of German market is furnished below that helps in determining the potential challenges, risks and difficulties for Saygin Yalcin for a business venture in the German market.
· Proactive and stable government
· Change of policies post Brexit
· Politics is dominated by European Union
· Politics highly influenced by the historical events of the place
· Highest economy
· Highest GDP recorded till 2007 but dropped in 2008 and 2010 due to the recession.
· Growing middle class
· When comes to Euros, the German currency is overvalued.
· Limited population
· The German society follows a variety of lifestyles
· Health has improved
· Higher literacy rate
· Highly improved technology
· The most advanced automation system
· The automobile industry is the strength of the country
· Around 1.21% is spent on Research and development
· Strict legislation and policies
· Complex in nature
· 33% of GDP is taxable
· Minimum 120 days for opening a business
· Companies are considered as separate legal entities.
· Steps were undertaken for preventing deforestation and emissions
· Enforced industries to ensure eco-friendly techniques
According to the table, it can be said that German market has a proactive and stable government. This nature of the government facilitates new business ventures from different international countries. However, changes in the political system have been noticed after Brexit that makes it difficult for the business ventures. The political system of Germany is highly dominated by the politics of European Union. Thus, it is difficult for the entrepreneurs and business ventures, as they have to consider the political aspects of both the European Union and the German market (Pregger, Nttsch & Naegler, 2013).
Germany is one of the countries in the European Union that has one of the highest economies. Till 2007, the German market has been recorded to have the highest economy but a major declination has been noticed during the recession that hit during 2008 and 2010. It took the German market some time to cope up the loss it encountered due to the recession. The country has a growing middle-class. However, when it comes to Euros, the German currency is overvalued (Schiebahn et al., 2015).
PESTLE Analysis of German Market
Germany is the country in the European Union that has the highest population. The population of German is one of the strongest characteristics that are considered while doing business ventures in the German market. The German society follows a variety of lifestyles that also provides flexibility in terms of the target market the business organizations select during the business ventures. The German market has a higher literacy rate that also makes it easier for new business ventures, as they are able to understand and uptake the new business idea easily (Plieninger et al., 2013).
Germany is one of the countries in the European Union that has the most improved technology. This facilitates business ventures that are technology-based. The German market has the most improved automation system. The automobile industry of the German market is its major strength. Thus, considering the technological advancements and the craze for the automobile industry, the tech-based business ventures are highly facilitated. The German market spends almost 1.21% of the GDP for research and development thereby, influencing entrepreneurs and new business ideas (Jentsch, Trost & Sterner, 2014).
The German market has strict legislation and policies. As a result, the legal system is comparatively complex, as different states have different legal requirements and policies. According to the legal system, 33% of the GDP is taxable in the German market. A minimum of 120 days is required for the business organizations to open a new business in the country. In Germany, each of the companies is considered as separate legal entities and has distinctive legal frameworks (Huang, Krysanova & Hattermann, 2015).
The government of Germany has undertaken steps for preventing emissions and deforestations and has enforced that the industries take eco-friendly measures for conducting business. The companies doing business in Germany need to ensure and abide-by the corporate social responsibilities (Drazkiewicz, Challies & Newig, 2015).
Saygin Yalcin, the German entrepreneur has proposed the new business idea of selling cars in just 30 minutes. The entrepreneur has aimed to conduct the business venture in the German market. In order to conduct the business venture in the German market, the macro environment has been analyzed. Saygin Yalcin has selected sole proprietorship. Based on the macro environment of the German market, the business venture proposed by Saygin Yalcin has potential challenges and difficulties.
Germany has a comparatively has a proactive and stable government that facilities new business ideas and innovations. However, Brexit has highly affected the business environment of the country. There has been a change of policies and frameworks in terms of business ventures in the German market. However, the politics of German market is highly dominated by the European Union (Cavusgil et al., 2014). This can be an issue for Saygin Yalcin because the new business venture needs to comply with both the political factors of the German market and the European Union.
Another issue that Saygin Yalcin will encounter is the higher tax rate that the country imposes. As the business venture is a new idea and is less recognized, it will take time to get settled in the German market. But, Saygin Yalcin has to pay tax appropriately and cannot compromise regarding it. In addition to, the strict legal framework of the German market will impose a penalty if Saygin Yalcin fails to pay the tax according to the business venture (Zhao, Hwang & Yu, 2013). Thus, the much higher rate of tax will be an issue for Saygin Yalcin, as it will take some time to sale the new business idea by Saygin Yalcin.
On the other hand, Saygin Yalcin has to invest a considerable amount in the business venture that might be another issue considering the economy of the German market. This is because Saygin Yalcin has selected sole proprietorship as the business venture. Thus, investing a huge amount of funds for setting up the business might be challenging for Saygin Yalcin (Ratten, 2016).
In this report, it can be concluded that entrepreneurs are the ones that have the vision of solving the problems of the target market by bringing innovative business ideas. Entrepreneurs are individuals with visions that help in solving the problems of the target customers. The report highlights the new business idea proposed by Saygin Yalcin that solved the issue of selling cars for the entire population. Saygin Yalcin is a German businessman that faced problem in selling his car while his visit in Dubai that gave him the idea of providing the opportunity to sell cars in just minutes. With this idea, Saygin Yalcin proposed the new business idea that allowed the customers sell their cars in just 30 minutes through an online website. Saygin Yalcin wants to establish the new business venture in the German market. The German market has been selected by Saygin Yalcin by considering the automobile industry of the country that is its major strength. Thus, keeping in mind the automobile sector and the population, Saygin Yalcin has selected the German market for the business venture. This provided an opportunity for the German population to sell cars in just 30 minutes online without much hassle.
Among the different kinds of business ventures, a sole proprietorship is the business venture selected by Saygin Yalcin and the sources of capital sources are a personal investment. As Saygin Yalcin does not want to include other individuals for the new business venture in Germany, it poses potential challenges and difficulties to establish the business.
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