Starting Your Own Business
Pretend that you are starting your very own business.
Before you start the
business, you need to determine and write the requirements of operating a
successful business. Please focus on the dollars as you apply concepts covered
in the course so far. You are writing an essay that captures all of your
initial thoughts and projections for a business that you will start up. Your
essay should address everything in the six (6) sections outlined below.
An ESSAY TEMPLATE that
includes the EXCEL WORKSHEET, is provided to support you in organizing your
assignment.
NOTE: A separate
version of the worksheet is provided in the Course Resources if you would like
to experiment with preparation of the Balance Sheet.
Please access the ESSAY TEMPLATE in
the attachment.
SECTION #1 –INTRODUCTION OF BUSINESS: Explain and describe the business you will start.
1. What will your business sell?
2. Why is this business interesting to you?
SECTION #2 – REVENUE
& PROFITS: Discuss how your business will generate money.
1. What are your projected year #1 sales? Provide
detail.
2. What are your projected year #1 expenses and
costs? Provide detail.
3. What portion of your sales revenue will be
consumed by expenses? Express in fractions and in percentages.
4. What portion of your sales revenue will be
profits? Express in fractions and in percentages.
SECTION #3 – PRODUCT
PRICE & COSTS: Explain the products/services that people will buy from your
business.
1. Provide detail on the prices you will charge
(be specific for each product/service you will sell);
2. Provide detail on the costs for each of your
products
3. Explain your price mark-up in percentages and
in dollars
SECTION #4 –
INVESTMENT REQUIREMENTS: Discuss your banking and loans.
1. What business accounts will your open? Explain
your banking requirements? Describe the bank(s) you would use.
2. Assume that you need to take out a business
loan to cover your initial costs and expenses. The amount of the loan is
equal to the amount of your projected year #1 expenses and costs (per item 1b
above).
1. Describe that loan and show your annual
repayment schedule over 10 years with 6% compound interest.
2. Then describe that loan and your repayment
over 10 years with 8% simple interest.
3. How will you reflect the expense or the value
of this equipment, supplies and inventory on your BALANCE SHEET?
SECTION #5 – BALANCE
SHEET ASSESSMENT:
1. Prepare a BALANCE SHEET that reports your Year
#1 business results in terms of ASSETS and LIABILITIES and EQUITY.
2. Explain your greatest Asset (versus all other
assets) and your greatest Liability (versus all other Liabilities).
SECTION #6 –
CONCLUDING THOUGHTS:
Summarize your business desires, concerns and expectations based on your
content above.
