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This coursework that I intend on completing will be based around setting up a business as part of my business studies coursework.

Extracts from this document...

Introduction

INTRODUCTION & BACKGROUND This coursework that I intend on completing will be based around setting up a business as part of my business studies coursework. I will complete it using the knowledge and information that I gain form my business lessons, and implement them to develop a business studies project that can be submitted in January. For the coursework I will cover a number of areas in business. Below are a few topics that I intend to look at: * Market Research * Pricing And marking strategies * Operating costs of a business * Worthwhile opportunities * Location * Potential cash flow * Competition * Possibly advertising ideas To aid me in my coursework I will look at various and suitable texts and material. I will be using the Internet as part of my secondary research as well as books in order to gain information. At the moment my primary idea for setting up a business is a music shop in Caerphilly selling CD's, cassettes etc. I believe that there is a clear gap in the market for a record shop, as there is only two shops in Caerphilly that really sell music. I feel by cornering this area of the market I believe there would be a great possibility of making it a successful business. I also enjoy listening to music whenever possible, which has made me knowledgeable about the industry and what people like etc With these primary ideas in hand I hope to come up with suitable decision and a fixed idea on what I would like to do as part of the coursework. Upon decision I will write a feasibility study and conclude on whether or not there is a suitable market and chance for success for the type of business that intend on choosing at the end. AIMS & OBJECTIVES My main aim will be to develop a suitable feasibility study for music shop in the Caerphilly area. ...read more.

Middle

This is because I would need to look at the many financial aspects of the business. By looking at these I can then forecast whether or not the business can cover costs and survive in the market place. I will look at this in my finance section. To aid me in my finance section I was able to send a letter to the owner of "Hitman" records in Newport. This small but similar shop to the one Caerphilly has been very successful. In the letter I was able to ask him various questions that involved where he received his stock from and the number of people he employs. I have included the information-received from the owner on the next page. There are many factors that help determine whether or not a business will go boom or bust. One of these factors that determine this is how successful the business will be their finances. In this chapter I will look at various financial aspects that the business I intend on setting up will face. Altogether I will include in this chapter: * Estimated finance to set up the business * Estimated fixed costs and variable costs * Prices of products and the mark-up price * Location of the business and it's direct overheads because of the place e.g. rent * Predicted cash flow * Profit levels * Predicted break-even point By looking at these I can hopefully determine whether or not the business is feasible and can be successful. FINANCING THE BUSINESS To help finance the business, the best option would be to organise a bank loan with the bank. This would allow me to lend the money, and then pay back monthly across a certain period of time. On looking at the financial figures below I have decided that it would be a good idea to take a bank loan of �7,000. This money would more than likely pay for the costs of setting the business. ...read more.

Conclusion

Perhaps in the future though, if another location with decreased overheads became available it may be a good idea to move location. From the information shown in my finance section I discovered, that the business would be capable of making a profit of over �16,000. This figure would only be possible if estimated costs remain the same. However, as always the case business cost change all the time. For example, one month may require less stock than the next and the next month may require purchasing more stock. This would change the results shown in the cash flow. Cash flow is also very much speculative and should not be completely relied on to estimate the businesses future. Although the closing bank balance sum of �16,924 is very good it could drop severely because of change. I have however tried to get the results as realistic as possible in order to get as accurate result as possible. Although the total net profit/closing balance for the year will be very unlikely to be exactly �16,924, the actual figure shouldn't be to far off that amount. I was also limited on the type of information I could collate in my finance section. The business will primarily be selling albums, single CD's and posters. Therefore I found it quite difficult to create a break-even chart to show when I can make a profit per month. If I was a business only selling bells for bikes, it would be easy to work out the break even because that would be the only product being sold. Although the �16,924 result proves to be very good this could be made a lot better. At the moment the net profit margin 15.4%. This is very low for the business. This would require amending main of the overheads in order to generate a high profit. From looking at the ideas and information that I have collated and created I believe that a record shop in Caerphilly would be a sound and productive idea. I would generate enough profit and profit the community with an alternative place to buy music. ...read more.

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