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Assessment of the Viability of Opening an Internet Café.

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Introduction

Assessment of the Viability of Opening an Internet Caf�. After analysing and evaluating all the possible aspects within my power I have reached a conclusion that opening an internet caf� is a worthwhile business. By the analysis of my questionnaire, which shows there is a market for this field. The potential customers of my business are mainly students and business men. There is an aspect to be considered here, as students do not have a steady income is it right to enter a field which is for them. However, the reason why this aspect does not worry me is as they only create 38.3% of my target audience, and business men 61.7% of my target audience. Business men have a stable income and their incomes can be 40 thousand year or more, meaning they have lot of disposable Income, so even if they see the usage as luxury item they will still use it. The location of the internet caf� is known to be one of the biggest factors affecting its success. The location is ideal; there are two high schools, three primary schools and a library near it. So there is a chance that the business will attract more customers than first expected. ...read more.

Middle

The cash flow forecast illustrates how sales revenue increases month by month, showing there is a market for the service. As more and more people become aware of the service more revenue is generated. The cash flow shows that during the holiday period there is a lot of revenue produced meaning students use this service a lot and there is also a market for the future as students will play a large part in the future. As now they are students they have limited money when they grow up it is likely they will still use the internet cafes meaning they wil be spend lot then. The cash flow is positive, so I should go ahead with the business, however as it is forecast can be slip ups and there could be external influences which affect its success, such as inflation - if inflation rises I will have to pay my workers more or even sack them. I will not be only sacking the so will be other business people with less money meaning less customers for my business leading to liquidity problems or even closure. Another financial document which was drawn up was a break- even chart. This document allows me to work out how long it would take the business to cover al its costs and make a profit. ...read more.

Conclusion

However, so far my results have been correct so very les likely to mislead now, however I am ready for any upsets as have personal savings of around �30,000 which could help me out, if any problems are faced. There are few problems which the cash flow forecast does not account for such as what if sales are lower, the price of stock goes up, an unexpected incident such as September the 11th occurs leaving the world market in a mess, people losing there jobs, etc. What if the government increases interest rates leading to cheaper imports, meaning internal-natal firms from abroad may decide to open internet caf� in local area, cause more competition, leading to lower prices and even price wars and if the business has not made enough capital by then it can close down. Opening a business has May risks in it, you never know what's going to happen next, the whole market may change tomorrow due to new technology, and the whole market may go into a recession, these are know as uncontrollable events. After analysis and evaluation of all the controllable aspects available to me, I have decided this business is worthwhile and has great potential of competing at national level in the next few years at the moment it will concentrate on local competition. ...read more.

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