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With reference to the local area would the opening of a new business represent a sound business decision?

Extracts from this document...

Introduction

Business Studies Coursework Nilesh Mistry Teacher: Mr Johal With reference to the local area would the opening of a new business represent a sound business decision? Introduction The aim of this project is to analyse 2/3 different properties and choose which of these would be best suited to set up a business. To help me make a decision I will be using methods like a table of comparison; area maps in the local Leicester area and estate agents. Methodology Section 1 (Location Section) As I have to identify a suitable location I will do research into 3 properties in my local area. I will carry out head counts at each location to find out which is the busiest. I will show the locations on a map then I will compare the locations in a table of comparison, to see which has the greatest business opportunity. Having done this I will then decide on the best location for my business. Section 2 (Product Section) As I have to choose a suitable product to sell/make I will first think of a range of products and say why I would like to sell them. Then I will conduct a questionnaire and analyse its results to see the effects of the various products will have on my business. Finally I will choose, based on the results of the questionnaire, my product. Section 3 (Break-even Section) Fixed costs, variable costs and revenue will be considered to determine how many units need to be sold to make a profit. This number will be compared against potential customers to see if the business is viable. Location Section Aim of This Section/Method: In this section I will compare my properties looking at their various different characteristics and then I will choose the best property taking in mind all their advantages and disadvantages. To do this I will conduct a headcount - looking at the number of people walking by the shop door at 15 minute periods, I will do this three times on each property. ...read more.

Middle

Conclusion & Recommendations Using the results from my questionnaire and my own knowledge of the area I think that setting up a music store in the area would be a sound business decision. This is because there are no other music stores in the area and the results from my questionnaire showed that most people wanted one in the area. What's more most of the people that visit the area are between 12 and 21 years olds therefore a good market to target as they are going to be into music, also most people said that they spend between �10 and �20 when they shop and the average price for a CD album is roughly �11 and the average price for a vinyl album or 12" vinyl is roughly �15. Also from looking at my results the opening times for my shop would mostly be in the afternoon as most people surveyed shopped at that time and most people only visited the area weekly, however I will still open most of the week especially weekends as they will be busier. I will now conduct another questionnaire, asking 50 people, to find out: * What price to charge * What types of music to sell * Whether to sell CD singles, CD albums and 12" vinyl's * What times to open * My market segment Mini Questionnaire I am thinking of setting up a music shop in this area. Please could you fill out this questionnaire for me? Thank You. What is your gender? * Male * Female What is your age group? * Under 12 * 12 - 21 * 21 - 31 * 31 - 41 * 41 - 51 * 51+ What type of music do you listen to? * Pop * Hip-Hop * R&B * Rock * Indian (movies) * Reggae * Heavy Metal * Bhangra * OST (Original Sound Track) ...read more.

Conclusion

As well as that I would sell different products instead of just CDs so that I can attract additional customers. From my break even graph I found that I would make �40 profit if I sold 2800 CDs. I then calculated my actual Break Even Point and found that I would need to sell 2792 CDs in order to break even. That would mean selling in the region of 95 CDs per day for my business to survive. I think that my break even was accurate because I didn't have to make an average cost of my products as I only have one, which I am selling at �10. Overall Recommendation I think that my business will be a success because my shop is located in a commercial area and it's in a very noticeable position. Also there is a lot of passing trade as the area is constantly busy as it is a well established commercial area. Also there is a bus route going to and from the City Centre and Train Station outside the shop. The product that I have chosen is music CDs it's a product that has lots of varieties which means a wide range of customers. New music songs and albums are being released by new and established artists all the time causing more people to buy music. Also I conducted a survey to ask my potential customers how much they would pay and they said that they would pay a reasonable �10 for a CD and I am charging that price. From looking at my all the information I don't think that my business will be successful because my product is already something which is popular at other well established stores so I think it would be hard for me to get customers. As well as that from my break even I need to sell 2792 in a month to survive which is a large target especially with competition from large chain stores. ?? ?? ?? ?? Nilesh Mistry 11SD ...read more.

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