#Immediacy on speech making

A decision must also be made as to the size of the ...

A decision must also be made as to the size of the steps you will take. A large increase in activity implies larger funding requirements, eg for machines or premises, and if production goes up, so must sales effort, storage capacity and everything else.

Remember that overhead costs will go up in large chunks eg the rent for a new shop or warehouse and this changes the break-even point. The best approach is to work out the smallest steps that can be taken at a time having regard to staff and their training, reaction of competition, and so on Getting there by three small steps is, far better than falling down on one big one.

Profit calculation When examining the alternatives eg size of steps work out a budget for each, add in a sales estimate, and produce a profit forecast. This will give you a fighting chance of choosing the best 'mix' of alternatives from a profitability angle and determining which is closest to your personal ambitions.

Developing another new business An entirely new business, either replacing your present one or additional to it, is another option open to you. You are already only too well aware of the agonies and otherwise of starting a business, as you have done it before. However, with a business already in existence, you have an opportunity to take advantage o more of three alternatives, namely: Vertical integration; Associated or complementary trading; and Diversification.

Vertical integration involves acquiring or creating the means to do the things which either your customers do or your suppliers do. For example, a manufacturer may set up his own retail shops, or a retailer may manufacture the things he sells rather than buy them. A wholesaler may add a retail side to his business, a timber company go into forestry, or a bookseller take up publishing. The principle is to add on to the business the activities of other businesses buying or supplying, in order to take the profits from both activities or even three of them.

An example is Boots PLC who manufacture, at Nottingham, a substantial part of their sales range.

Vertical integration can also offer the advantage of more certainty of supply if done properly. Associated or complementary trading can also offer greater profit opportunities.

An associated or complementary business is one which uses closely similar skills and other resources to the 'parent' business, eg A restaurant branching into outside catering; A printer offering a design service; A freight forwarder offering cargo insurance; A garden centre doing landscape gardening. Some of these expansions to a business have some similarity to integration and there may be features of both present. Such was the case of a haulage company who used their premises to provide a vehicle-repair service.

Diversification can encompass both vertical integration and complementary trading or be entirely separate. The tobacco companies have been diversifying into a range of activities since the health scares started, including foods, alcohol and leisure. This is to give them greater security as fag sales fall and their income is eroded. A further opportunity to look for and exploit is the chance to use the same resources for both businesses.

The dairy companies, when selling bread as well as milk, are using ...

The dairy companies, when selling bread as well as milk, are using the same grounds man and ... read more

Whether or not you are prepared to pay the asking price will ...

Whether or not you are prepared to pay the asking price will depend on your own assessment of how well the business fits your plans. For example, the buildings may have... read more

This plan should include: Group and individual meetings with the employees to ...

This plan should include: Group and individual meetings with the employees to let them get to know you and you them; Explanations of y