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Is there Scope for a new Business in the Newbury Area?

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Introduction

Business Studies Coursework Is there Scope for a new Business in the Newbury Area? Finance Before I start this section of work, I need to make a note. Halfords, one of my competitors, have just expanded their bike section of the shop, selling a huge range of bikes, and providing a full time servicing service. This will affect my decision of starting this business tremendously. To be able to start up my business, I need capital. Cash, in other words. It is virtually impossible to run a business without capital, as well as a constant cash flow. This means for my particular business, that I will need enough money to start my business (enough stock to start with, decoration, enough equipment to help me service bicycles etc.) Then, I also need to have a constant cash flow, where money comes into then business, and then goes out. Hopefully, I will be able to have more money coming in than I have going out; resulting in a profit. Start-up Costs The things I will need to start up my business are: 1. Decorating a) Flooring b) Painting 2. Stock to start up with a) Sufficient Bicycles b) Enough Components 3. Till 4. Desk 5. Equipment 6. Business Cards 7. Accounting System (Either computerised, or on a manual system) 8. Telephone System 9. Sign outside the door 10. Shelving 11. Alarm System I have written to 4 shop fitting companies, and none of them have replied to me. ...read more.

Middle

* Decorating �45.69 * Stock to start up with GT �2040.00 Giant �2930.00 Marin �3600.00 Specialized �3600.00 * Enough Components �580.00 * Till �255.50 * Desk �450.00 * Equipment �90.87 * Business Cards �70.00 * Telephone System �99.74 * Sign outside the door �400.00 * Shelving �100.00 * Alarm System �500.00 Subtotal �14761.80 Rent �19950.00 TOTAL �34711.00 How to get the Money I need Looking at these prices, I feel that I can financially set up my business. I have savings of approximately 16000, but I feel that it would be un-wise to use up all my savings. I would like to keep at least �5000 spare, for in case the business is unsuccessful. Therefore, I will use �11000 of my savings. That means that I will need to raise �24000. To get the money, I feel that a bank loan will be the best way to borrow money. I have spoken to an Accountant, (Derek Turner) about the issue, and he has assured my that between The Halifax, NatWest, Royal Bank of Scotland, and Loyds TSB, that NatWest will provide me with the best loan at the best interest rates. These are the interest rates that NatWest offer. Amount of Loan Rate Fees �1000 - �2900 20.9% APR No Fee �3000 - �4900 15.9% APR No fee �5,000 - �9,900 12.9% APR No fee �10,000 - �14,900 10.9% APR No fee *�15,000 plus 9.9% APR No fee *I will be borrowing at these rates. ...read more.

Conclusion

I only need to sell one or two very expensive bikes (up to �4000) to earn most of the months revenue. * Around here, cyclists ride all year round, there are very good tracks for cross country and downhilling. * Seasons. Even though I just said that people wont be bothered by seasons, They will definitely spend more around summer. That's because people are out, jumping their bikes, breaking them and needing spares. Therefore they will be buying more. I will also have to have an after season sale, just like the Cycle Shop, to be competitive. Christmas will also be a good time for me, as children may like bikes for their Christmas. * Bikes that most people buy, average out on about �600, so if I only sell 10 each month, I will definitely make enough each month. * My first month will not be as good as the following ones, seeing as I will not be as well known in the area. I have spoken to the manager of The Cycle Shop, and he said that I can expect to earn about �4500 on average each month as a new business Therefore, I feel that I will earn roughly the following amounts each month. Month Revenue January �2700 February �3300 March �3900 April �4600 May �5600 June �5600 July �5500 August �5300 September �5200 October �4700 November �4800 December �5200 I feel that, financially, I can start this business, but I must now take into consideration, the fact that Halfords have just expanded. ...read more.

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