Part 1
I own a retail store and the kind of products the business deals in are mainly consumer products. The range of products the business offers are food products (grains, baked food products, refreshment, milk, groceries), apparel, beauty products, books, as well as pharmaceutical products. In essence, the retail store operates as an “under-one roof store” where customers can get an assortment of goods under one store. There are also plans to include more products in the next five years, especially farm equipment, and construction materials. There has been great demand of these items in the community, and therefore, there is the need to tap this market and generate more revenue for the business. Most importantly, the business operates both online and as a physical store. The decision to introduce an e-commerce platform was motivated by the needs of young people. With time, we realized that young people, and especially students, prefer convenience even over cost. Young people dislike the idea of traveling physically to the business premises each time they are in need of certain items. For the online model, the platform allows consumers or customers to place their orders, pay for them, and then they wait for their deliveries. The business has invested heavily in the delivery chain because of the increasing number of customers. Generally, Americans have a busy lifestyle, and that is probably the reason online shopping is increasing every day.
I started the business five years ago, as a small retail shop, and at the start of the business, I was the only person running it. Additionally, I did not sell many things because I did not have so much capital. Therefore, I strategized to sell only those items that moved fast, like fast foods, snacks and refreshment. With time, I had to ask my brother to lend me a hand in the business because it had started to attract many customers and I was facing challenges of serving all of them fast and efficiently. After about one and a half years, I had to move to a bigger space and employ more people. At that time, I had seven people who helped me to run the business. However, after two more years, I had to relocate to an even bigger business premise, the one which the business operates at currently. With increased capital and customers, I employed fifty more people, and it is likely that I will employ even more people in the near future. I have plans to expand the business to other states, and in the long-term, I envision myself going global to compete with some of the formidable retail businesses such as Wal-Mart and Costco. I have the potential to be like Amazon or even better, just time will tell. Certainly, I am the one who will determine the extent I can go in operating the business.
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Part 2
Insurance companies’ relationship or role in meeting some of the needs of my business involves cushioning me against specified risks. According to Njegomir & Rihter (2017), insurance companies provide the much needed financial relief when a business faces undesirable unforeseen events. For instance, a fire accident can have the potential of damaging all the stock of my business, and without strong financial muscles, it can be very difficult to bounce back to the business. Other unforeseen events such as burglary, natural disasters, or collapse of some of the buildings can have equally damaging results. Another important aspect involves taking care of the needs of the employees, especially health and accidents. Therefore, insurance is very important in meeting the financial constraints involved in any of these circumstances.
Pension funds mainly involve securing the retirement benefits of especially the employees. Pension funds can either be collected by government corporations or private pension firms (Johnson & de Graaf, 2009). Paying employees’ pension benefits is imported because they also need to have good living conditions after retiring. On the aspect of finance companies, they can either be banks or other finance saving and lending institutions. In relation to my business, finance companies help me to save and can also save the situation when I am in need of capital to expand my business or to meet some financial obligations (Ghazi, 2019). Even in the payment of employees, I need financial institutions to authorize payment to the employees from my business account. In that way, I definitely avoid the hustle and bustle of trying to pay each employee from out-of-pocket means. Regarding the differences among these institutions, insurance companies cushion against damages, pension funds secure employees future, while financial institutions such as banks help in saving money as well as can lend capital if the business has a good credit score.
I think all the three financial institutions are beneficial to the business. I need insurance to cushion the business against unforeseen undesirable events; pay pension for my employees as a way of motivating them and ensuring that they will have the ability to sustain themselves after they can no longer work; and use banks to save money as well as transact with suppliers, customers, and my employees. To transact with all these financial institutions, I need the services of financial managers and advisors, as well as good accountants. As the business continues to grow and expand, I will not have the time and ability to keep records, pay suppliers, and at the same time look into the needs of the employees. Therefore, I definitely need to work with various professionals who have knowledge especially in financial matters.
References
Ghazi, R. (2019). Financial institutions and their role in the development and financing of small individual projects. https://www.researchgate.net/publication/334730479_Financial_institutions_and_their_role_in_the_development_and_financing_of_small_individual_projects
Johnson, K. L., & de Graaf, F. J. (2009). Modernizing pension fund legal standards for the twenty-first century. Rotman International Journal of Pension Management , 2 (1).
Njegomir, V., & Rihter, J. D. (2017). The role and importance of insurance of business and supply chain interruptions. Management: Journal of Sustainable Business and Management Solutions in Emerging Economies , 20 (77), 53-60.
