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How to make the mobile disco more profitable

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Introduction

How to make the mobile disco more profitable Reduce Costs In the Manic Mixers business, there are two costs involved. One is the variable cost and the other is the fixed cost. If the owners were to reduce the cost they would attract much more customers and benefit with more revenue. At the moment the Manic Mixers have around three bookings be month. Each booking is charged at �85. If this price was lowered this would be another attracting factor. Alternatively if they raised the price by around �5 they would still achieve the same goal. With the extra income, more CDs could be bought. This would make �90 value for money with the new music. If there was a change in the variable cost it might solve the problem of the profit income the Manic Mixers are looking for. ...read more.

Middle

- � 215 = � 55 per month With this plan and the extra profit coming in, the Manic Mixers could get special tools to hold securely their equipment to avoid breakages. If this idea succeeded, then the price for breakages could be lowered. This would help their Profit even more. I recommend that they should change their variable costs in order to further their business. If the business collapsed or there was a lack of customers, the extra profit they could be receiving could be an option to fall back on if in trouble. Increase Price? Another way of making the mobile disco a more profitable business would be to increase the price. We assume that the Manic Mixers have three bookings per month. When a business is set- up, research into what you are selling, at how much and to whom is important. ...read more.

Conclusion

Lowering the price might also turn out to be the only option in order to obtain more and more bookings per month. Apart from good value and fun the mobile disco has to be well organised. After the Manic Mixers have done their research into their potential customers, the change in making the mobile disco more profitable could look a bit like this. Revenue = price per item x no. of items sold = � 75 x 5 = � 375 Total costs = fixed costs + variable costs = �100 + � 80 + (no. of items x variable cost per item) = � 180 + 3 x � 20 = � 240 Profit = revenue - total costs = � 375 - � 240 = � 135 per month From these projected results, research is an important factor when thinking about changing price. This plan shows that sometimes decreasing price is a better option. Saleem Kamal 10B 27/04/07 ...read more.

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