business writing question and need a sample draft to help me learn.
This week you learned about 4 types of operating budgets ( Incremental, Activity Based, Value Proposition & Zero Based.) The type you use depends on the nature of your organization and the goals you are pursuing. Reflect on the new business you started in Weeks 3 and 4. Imagine you are producing a new product to sell in your store.
Create a 10- to 12-slide PowerPoint presentation with speaker notes and visuals that addresses the following:
Briefly describe the product or service and the individual items you may need to fund to create it.
Determine the type of operating budget to use if your major objective for the year is to significantly improve the value you are providing for your customers, employees, and stakeholders.
Determine the type of operating budget to you use if your organization has become bureaucratic and needs a major restructuring based on a new direction you are pursuing.
Assess the relationship between an operating budget and a financial statement.
Estimate the amount of money you will need for the individual items required for launching your product or service. Determine where you will acquire this funding.
As your company grows and is ready to scale, you are likely to expand your business (new equipment, new locations, more employees, new products, etc.).
Identify the items you may need to fund to scale your business to the next level.
Determine where you will acquire the total amount of funding you identified above so you can scale your business to the next level.
Requirements: the minimum length requested
Working Capital to Minimize Risks
05/22/2023
Part 1
Collateral for securing a loan
I have potential collateral alternatives to enhance my chances of obtaining a household business loan. For instance, I have a car which offers a high value and can be a potential collateral to present to the bank and attain a significant amount to support the business. At the same time, I have developed other assets over time, including different types of valuable assets, such as furniture, computers, and other related items that can serve as a secure strategy to attain bank credits. Moreover, I can present my cosigner, a cousin who is ready to offer me support with valuable assets like land to secure my bank loan.
Source of debt financing
There are several sources where I can turn to get debt financing. My options include credit unions and financial banks to access funds. At the same time, I can fund my business with term loans as I need enough capital to purchase necessary items to promote my business operations. These institutions will likely favour my credit needs as they examine the business-worthy and potential collateral to secure the loan. With numerous collateral options and the potential growth of my business, I am likely to get over $12000, regarding the high business needs I also require. This, however, comes at a significant interest. It can range from 4% to about 10%. However, I will have to present a personal guarantee, which my parents are eager to offer, as a security needed to attain funds
Potential equity financing partner
I have also pinpointed potential partners to help it access and leverage equity financing. I also plan to seek a partnership with private equity firms to offer potential support for the business to thrive. Sequoia Capital can invest up to a million dollars. However, their investment depends on the business need, which I will need about $500000 in a single deal. The partnership I will build with Sequoia Capital is critical. The firm helps firms at their early stages of growth and helps them improve over time. This meets my business goals as I plan to grow gradually to build a robust business strategy that will disrupt the market for household items.
PART 2
Q1.
The cost of goods sold (COGS) is the direct costs associated with producing or acquiring a product. In this case,
materials cost per table is $135
Labor cost is $25/hour for 5 hours = $125.
Therefore, the total cost per coffee table is $135 + $125 = $260.
COGS Percentage = (COGS / Revenue) * 100
= ($260 / $689) * 100 = 37.74%
Q2.
The gross profit margin measures the profitability of each unit sold. It is calculated by subtracting the COGS from the revenue earned and dividing the result by the revenue (Tramplin, 2023).
Gross Profit Margin = ((Revenue – COGS) /Revenue) * 100
= (($689 – $260) / $689) * 100 = 62.26%
Q3.
Given that the purchase cost of each 3 pack of lenses is $29.95 and the selling price is $59.95, the COGS can be calculated similarly as before:
COGS Percentage = (COGS / Revenue) * 100
= ($29.95 / $59.95) * 100 = 49.96%
Q4.
Given that 8,000 3-packs of lenses were sold in one year:
Total Revenue = 8,000 * $59.95 = $479,600
COGS = 8,000 * $29.95 = $239,600
Operating Expenses = $144,080
Thus,
Net Income = Total Revenue – COGS – Operating Expenses
= $479,600 – $239,600 – $144,080
= $96,920
Net Profit Margin = (Net Income / Total Revenue) * 100
= ($96,920 / $479,600) * 100 = 20.21%
Q5.
Net Income = Total Revenue – COGS – Operating Expenses
= $479,600 – $239,600 – $144,080
= $96,920
Considering that the investor owns 50% of the company, with an initial investment of $150,000 and a net income of $96,920 for the year:
ROI = (Net Income * Ownership Percentage) / Investment Amount
= ($96,920 * 50%) / $150,000
= $48,460 / $150,000
= 32.31%
Q6.
Handcrafted Wooden Cutting Boards could be a viable item for my store. These cutting boards are skillfully handmade from quality hardwood to be useful and aesthetically beautiful. They accommodate varied client preferences by being available in various sizes and designs. With an effective marketing strategy, I anticipate selling around 1,000 handcrafted wooden cutting boards in my first year of business.
Q7.
COGS: The cost to make each cutting board, including materials and labor, is $20.
Selling Price: each cutting board will go for $50.
Gross Profit Margin = ((Revenue – COGS) /Revenue) * 100
= (($50 – $20) / $60) * 100
=50%
Q8.
Rent: $800 * 12 months = $9,600
Utilities (electricity, water, and heating/cooling): $200/month = $2,400 p.a
Marketing and Advertising: $ 1,200 p.a.
Packaging and Shipping: $2 per cutting board = $2,000 for 1,000 cutting boards.
Miscellaneous Expenses: $2,500
Therefore, the total operating expense will be;
$9,600 + $2,400 + $1,200 + $2,000 + $2,500 = $17,700
References
Tamplin, T. (2023). Calculating Gross Profit and gross profit margin. Finance Strategist. https://www.financestrategists.com/wealth-management/financial-statements/gross-profit/calculate-gross-profit-and-gross-profit-margin/
We are a professional custom writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework.
Yes. We have posted over our previous orders to display our experience. Since we have done this question before, we can also do it for you. To make sure we do it perfectly, please fill our Order Form. Filling the order form correctly will assist our team in referencing, specifications and future communication.
1. Click on the “Place order tab at the top menu or “Order Now” icon at the bottom and a new page will appear with an order form to be filled.
2. Fill in your paper’s requirements in the "PAPER INFORMATION" section and click “PRICE CALCULATION” at the bottom to calculate your order price.
3. Fill in your paper’s academic level, deadline and the required number of pages from the drop-down menus.
4. Click “FINAL STEP” to enter your registration details and get an account with us for record keeping and then, click on “PROCEED TO CHECKOUT” at the bottom of the page.
5. From there, the payment sections will show, follow the guided payment process and your order will be available for our writing team to work on it.
Need this assignment or any other paper?
Click here and claim 25% off
Discount code SAVE25