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Find out if a game and rental shop would be a successful business.

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Introduction

Information for the Examiner In this essay, I am trying to find out if a game and rental shop would be a successful business. I decided to do this because lots of people rent games and films and there is only one local rental shop I will answer this question by doing a survey that asks questions about whether or not people would use the shop and what console and players they have. With the information, I will calculate the initial costs of setting up the business by working out the total needed to spend on the games and the rent. I will also work out if the business will make profit or a loss. To work out my results, I have taken a survey of 20 people to help further my market research and I have also done other research which will help me find out my competitors prices, and to work out the cost of a shop / room. This is what I found: * It will cost a lot of money to start up the business. * To attract customers, you must have a wide variety of games, and videos. * My business started with a lot of debt, but over time, had the potential to make a lot of profit. ...read more.

Middle

My advertising would mainly be leaflets posted through doors and perhaps an advert in the local newspaper, this would help me get known and attract new customers. I would spend �200.00 on leaflets and �200.00 on the newspaper advert. I have decided to buy the games, videos and DVDs from a high street shop because it will be very difficult to buy from a warehouse. The game prices average at �39.99, videos at �12.99 and DVDs at �16.99. I will supply games for the most common consoles. They are as follows (most common console first.) PC, PS2, PSone, X-BOX and GAMECUBE. I will supply more games for the more common console as they are more likely to be rented. The prices I have chosen to rent the Games at is �3.99 and for three nights. I have decided each game should cost �3.99 because on my Questionnaire (see appendix A) the most people said that it was the most reasonable price, and also, I did some research at my local rental shop and the games were also at this price. However, the older games were cheaper to rent as they wouldn't be as popular. To keep the results simple I will presume that they are all new games hence all cost the same amount. I decided to make the maximum amount of nights three because my research showed that other rental shops have three or less. ...read more.

Conclusion

If I did get the rental price wrong, (which is likely) I might make less profit than is expected, if the rental price does increases by more than �400.00 I would not make any profit. I also think that my prediction on the amount of business I would get slightly inaccurate, as the local rental shop is Blockbusters and has chains all over the country; they would have a large amount of films and already have a good reputation, they are very likely to take the majority of the business available. Blockbusters is also an economy of scale i.e. they buy in such bulk that the films and games become very cheap. I also didn't get a license, so if this business was to get up and running, I would have to pay for it, which may cost me quite a lot which would perhaps result in the business failure. After considering all these factors, I think that a Game film rental shop can be a successful business if it survives its first year in which it would have a lot of debt, from the rent of the shop and from the games and films originally purchased, however, you must aim at a big market (e.g. not just at children) and have a large selection of films and games to attract customers. ...read more.

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