Small Business Start-Up - Coursework Example

BUSINESS REPORT MODULEEaster course work, 2012Case study:A SMALL BUSINESS START-UP1. Your first task is to use the information in the case to prepare this presentation – the cash flow figuresand the explanation to support them – in order to justify the granting of a loan. This requires you to set out the cash flow forecast and write the words to explain the thinking behind each element.(50 marks)Cash inflow forecastSavings £750 = This is the much amount of money that each underage entrepreneur (Michael and Jane) have decide to invests into their business from savings.

This means that the total amount of money brought into the business by both the entrepreneurs sums up to £1500. Bank Loan £1000 = This the total amount of money that Michael and Jane intends to get from the bank inform of bank loan. Sales £10000 = This is the amount of money that will be realised from the sale of 2,000 orders per month, with an average value of £5 per order.Total capital £2,500 = This is the total amount that the two entrepreneurs- Michael and Jane plans to begin their business with as start up capital.

Cash outflow forecast£20 per 100 bunches (£2000): This is the amount of money that will be used for buying daffodils for which could be sold to customers for 90 pence per bunch.Total Cash flow: 750 + 1000 + 10000 + 2,500- (2000) = £11, 250 2. Jane and Michael have also prepared a break-even chart, showing fixed costs, total costs and total revenue. In doing this, they have assumed that the highest number of orders they could cope with is 2,500 a month. You second task is to prepare this break-even chart.

(25 marks)3. You should also prepare answers for the following questions they anticipated being asked:How will they promote the business?Michael and Jane plans to apply a wide range of marketing strategies for their business. Key among the strategies to be applied include but not limited to personal selling, fliers, posters, rack cards and signage. The entrepreneurs have decided to use the following promotional strategies owing to the fact that they are quite economical, easy to apply and the fact that their area operation is quite limited.

For instance the market niche for the business involves serving the wealthy homes of Weybridge and Esher with a 'Dewfresh Flower Delivery.What if they only achieve 1,000 orders a month? Calculate their profit or loss figures for this eventuality.Sales (1000 order X £5) = £5000Less: Variable cost (1000 order X £2) = (£1,000)Less: Fixed cost (£1,000) = (£1,000)Profits £3,000If they are initially successful, how will they maintain the momentum? What are their plans for when the daffodil season is over?

The entrepreneurs is interested in maintain contact with their loyal customers. This is to ensure that the business does not lose their loyal customers to their competitors. Michael and Jane will employ techniques such as email to frequently contact their customers. Why buy from a wholesaler rather than from a flower grower?Convenience-The wholesale store may be close to your residence hence it becomes very easy to get what flower you need. Variety- Wholesale stores tend to stock a wide range of flower species from different farmers from different regions unlike most of flower growers who only nature limited range of flowers.

How much confidence can be placed on their survey results as a basis for their market predictions?Considering that Michael and Jane are still youths with limited skills in analysing information relating to market patterns it is obvious that an individual will place a considerable low confidence level on the survey results of the young entrepreneurs. (5 marks each)