Task 1
You want to start a summer business to earn money. What will you do? You have to consider how much money you can afford to invest in this business, how much it will cost you to make each item, and how much you’re going to charge for each item. Research something that would be reasonable to make and sell with the start-up investment you have determined.
a.What is the total amount of money you are willing to invest in this business?
b.What item are you going to make and sell? Why?
c.Describe how your business will work. How much will it cost you to makeeach item? How much will you sell each item for?
d.Do you think your business will be profitable? Explain your answer.
Well that's the thing I don't know what to sell.
We have no idea what you want to sell.
a. Determine the total amount of money you are willing to invest in this business. Consider your personal budget and how much you can afford to allocate towards starting the business. This will be the initial investment amount.
b. Research something that would be reasonable to make and sell with the start-up investment you have determined. Consider your skills, resources, and market demand. Choose an item that can be produced at a relatively low cost and has the potential for high demand in the summer season.
c. Describe how your business will work. Start by calculating the cost to make each item. Consider the cost of raw materials, production tools, packaging, and overhead expenses. Then, determine the selling price for each item. Research the market price for similar products and set a price that covers your costs and allows for a reasonable profit margin. Consider selling directly to customers through a physical location, online platform, or a combination of both.
d. Analyze whether your business will be profitable. Evaluate the profit margin by subtracting the cost to make each item from the selling price. Consider the potential demand for your product, competition, and any additional expenses such as marketing and transportation costs. Estimate your potential sales volume based on market research. If the profit margin is positive and your sales volume is realistic, your business has the potential to be profitable. However, it's important to conduct thorough market research and make necessary adjustments to increase your chances of success.
To answer these questions and determine a reasonable summer business idea, we need to follow a step-by-step process:
a. Determine the total amount of money you are willing to invest in this business:
First, analyze your financial situation and evaluate how much money you can afford to invest without causing any financial strain. Consider factors like savings, available funds, and any potential loans or investments you might have access to. Set a specific budget for your summer business, ensuring it is a realistic and manageable amount.
b. Research a reasonable item to make and sell:
Next, conduct market research to identify a product that aligns with your budget and has the potential for profitability. Look for products that are in-demand during the summer season, have a low manufacturing cost, and can be produced within your budget constraints. Consider factors such as materials cost, production time, and market trends. For example, selling handmade jewelry, custom t-shirts, or unique accessories could be potential options.
c. Describe how your business will work:
Once you have decided on the item you want to produce, outline how your business will operate. Determine the cost of production for each item by calculating the expenses for raw materials, equipment, packaging, and any other overhead costs. Additionally, consider any labor costs if you plan to hire employees or allocate your own time for production. After determining the production cost, set an appropriate selling price for each item based on factors such as market competition, perceived value, and desired profit margin.
d. Evaluate the profitability of your business idea:
To determine if your business will be profitable, analyze the difference between the selling price and production cost for each item. Calculate the potential revenue by multiplying the selling price by the estimated number of items you can produce and sell. Then, subtract the production cost from the expected revenue to calculate your profit. Consider other potential expenses, such as marketing and distribution costs, and ensure that your profit margin is sufficient to cover these additional expenses. If the projected profit exceeds the investment and operating costs, your business has the potential to be profitable.
Remember, this process requires careful planning, research, and consideration of various factors. It's advisable to create a detailed business plan and consult with experts or experienced entrepreneurs to increase your chances of success.