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The final project is designed to test your competency in Business
Principles 1301. Throughout the semester you have learned
general business concepts including business formations
(Starting and Growing a Business) and the ability to decide the
best business formation for your type of business. You also
learned the importance of creating an entity that limits liability to
your personal assets. You were introduced to different
management styles and the various tiers of
management (Managing for Quality/Competitiveness). You
were also exposed to how to utilize your human resources to
advance your business and why ethics and social responsibility
matters to a company (Creating the Human Resources
Advantage). Marketing principles and techniques including
digital marketing were presented as demonstrations of obtaining
customers to grow a business (Marketing: Developing
Relationships). You were also introduced to the idea borderless
business ideas and how you can have an international presence
from a desktop (Business in a Changing World). You received
general information about financing a business from its inception
and the need for generating capital to operate and grow
(Financing the Enterprise). You will use all of these concepts to
deliver a proposal for a capital investment from an investor. The
proposal will make a direct capital investment request for funds
to improve and grow your business.
You currently have a “Designer Sock” business organized as a
“Sole Proprietorship” in a storefront located next to a designer
sneaker shop. You thought it was a good business decision to
open next to the sneaker shop because you both appeal to the
same audience and you could draw from their established
customer base. The sneaker shop has been in this location for
over 10 years. Based on your sound business research you
decided to use your life’s saving of $19,578.40 to make your
dream a reality. You procured a lease on the spot, a 1000 square
foot storefront. The lease was a 1- year term at a rental rate of
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$1000 monthly. The deposit was hefty because you lacked
commercial rental references and therefore it required a deposit
of $3000. Hence, your initial rental start-up cost $4000. You
recognized that the annual rental amount represented about 60%
of your overall capital investment but you believed the loss would
be offset by the reduced marketing needed from the draw on the
sneaker store customers. Storefronts come with additional up
front and monthly costs including lights, water and electricity for
the store. The collective set up costs for utilities and deposits for
those commercial services were an additional $1000.
Regarding inventory, you thought it best at the time to carry
limited inventory. Your strategy for inventory was to purchase 2 of
each styles of sock, one for display and one for sale. You set
your computer to immediately reorder when a style was
purchased. You purchased 1000 socks which included 500
different styles at 5.20 per pair wholesale. The total cost for start
up inventory was $5,200.00. Your projection was to sell 1000
pairs of socks a month at $16.00 per pair which would generate
$16,000 in revenue a month. Additionally, you had to purchase
displays, a cash-register, a counter, setting, mirrors, a vacuum
cleaner and cleaning supplies for the store. The total cost for the
additional start-up items was $1200.
Since you elected to have a “Sole Proprietorship” you decided it
would be more profitable to go it alone. You worked 12 hours a
day Monday – Saturday and rested on Sunday. Since you have
no employees, you do all of the work yourself. You order stock,
stock shelves, arrange the socks on displays, answer calls, ship
orders, book-keeping, help customers and clean the store daily.
You conducted marketing campaigns via social media marketing
and did flyers for the sneaker shops nearby.
You pioneered this unique sock concept as you had never even
gone into a store that only sold socks. There was a lot of buzz
about the idea on social media. Everyone agreed that you had an
unique niche product and was hopeful for your success. There
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was a cost to advertise via social media. You reached 500 people
for every $50 you invested. You see the need to reach at least
5000 people per month to become more profitable.
Your family was so proud of you that they helped with the “Grand
Opening”. Your mother, father, sister and brother told everyone
they knew about your success and insisted that they all join in on
the opening celebration. The marketing for the opening
celebration total $571 for the experience. You invited the mayor
for a ribbon cutting ceremony and all the local businesses and
residence. They were all very excited and promised to support
your business.
You have been open now for 12 months and you are assessing
your level of success and how you might better reach your
targeted goals moving forward. You have now operated for a full
calendar year and have been able to ascertain some patterns in
your business. Your sells numbers reflect sells for the following
months: Jan – 38, Feb – 76, March -114, April – 115, May – 176,
June – 275, July – 589, Aug. – 700, Sept. – 115, Oct. – 115, Nov.
– 700 and Dec. – 1000. You also noted that you have more sales
request then inventory. You also documented that many
customers wanted to purchase multiple pairs of the same item. It
was also indicated that each customer purchased an average of
4 pairs of socks and a good percentage of them wanted to
purchase additional unavailable items.
Your task is to provide a proposal to the prospective investor,
“Show Me The Money, INC.”, giving supportable evidence of why
it is financially prudent to invest capital in your existing business.
You will demonstrate why your business model is the best
business formation for your business type. You will provide a
roadmap into the way you formed your company and why this
formation was the best pathway with supportable evidence of its
advantages and the disadvantages (ie. Sole proprietorship,
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Partnership, Limited Liability, Corporation) for
profitability. [SLO=3]
Additionally, you will illustrate how you currently operate your
business with regards to human resources and management
styles. [SLO’s =1&10] You will also provide the investor with a
written document describing your basic financial statements and
show how they reflect the activity and financial condition of your
business. Explain the banking and financial systems,
including the securities markets, business financing, and
basic concepts of accounting to indicate the investor your
proficiency in business. [SLO’s =1,7&8]
Next, you will ensure that the investor is clear on your level of
integrity in running your business and your stand on social
responsibility, ethics and how they relate to business law. You will
further describe the importance and effects of ethical
practices in your business while demonstrating the ability to
analyze business situations to identify ethical dilemmas and
ethical lapses.
[SLO’s= 2&6] You will also Identify and explain the role and
effect of government on your business and how it can impact
profits. [SLO = 5] You will specify how your leadership and
management by describing the relationship between social
responsibility, ethics, and law in business in an effort to make
clear you know the importance of application of each concept in
running a business. You will also describe the importance and
effects of the ethical practices in your business and how it
enables you to analyze business situations and identify
ethical dilemmas and ethical lapses. [SLO = 2,6&9]
It is important that the investor understands your inventory,
management, marketing, and location decisions. You should also
explain why you initially started your business with the existing
formation, and whether based on your experience, it’s the most
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feasible way to continue operating under this framework. Identify
and explain the domestic and international considerations
for today’s business environment: social, economic, legal,
ethical, technological, competitive, and international and
whether it would be prudent for you to operate
internationally. You will also Identify strengths, weaknesses,
opportunities, and threats of information technology for your
businesses. [SLO’s = 4 & 11] You will also give a line item break
down of your start-up expenses, monthly revenue generations
and monthly expenses and profits and losses. You will further
outline your anticipated expansion in detail. You will specifically
request capital from the investor. You will indicate whether your
company is a product or service and whether any licensing is
required. You will specify your management style and the number
of employees currently employed and the intention of adding
additional staff if applicable.
Finally, your proposal will make a specific capital request in a
specific amount detailing how the capital will be used for
improvements, expansion and ultimately for additional profits.
You will paint a picture convincing the investor of how he would
benefit from his investment. You will give a timeline for repayment
of the investor’s capital and the amount and manner of
distribution. Also, you will convince your investor that your
company is socially responsible and operates on an ethical basis
and why that is important. Explain to your investor perceived
barriers to your success and methods to overcome any possible
problems. Give step by step details of how much product you
seek to purchase and or how many employees you need for
growth and the management style you anticipate using.
The best proposal will have a clear demonstration of where, how
and why you started your business and how its investment would
look if you had the capital infusion, illustrated by chart, graphs
and images and written support. It will clearly demonstrate how
you would use the capital dollar for dollar. The best proposal will
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also reference verifiable business principles that support your
success. It will also give proven ideas that will help to motivate
the idea (ie. other companies that have proven success with your
model idea.) It will use verifiable available resources including
chapter readings, news articles, Texas Secretary of State,
company profile, GAP & GAAS and financial accounting
resource. All utilized resources must be referenced.
The best proposal will fully describe their business and provide
evidence of why this business idea is prime for long-term or
short-term profitability. It will also specify its long-term and shortterm
goals. It will have the best supportable documentation
including proven business success methods of similar products
or industries and supportable business ideas from a theoretical
prospective (ie. referenced information from your chapter reading
and other referenced material). The best proposal will also will
use facts and not opinion to demonstrate the request is based on
logical, reasonable and rational supportable proof (ie. existing
sales trends, market trends, buyer demands, industry popularity,
product endorsement).
The best proposal will also outline the number of customers on a
daily, weekly, monthly and annual basis the store currently
service and numbers needed to reach your desired goal. You will
also indicate in detail the amount of inventory needed in stock to
reach the desired goal. You will also specify the number
employees needed to accomplish the goal or some alternative
plan to reach your goal in specific step by step detail.
Your grade will be measured by your detailed ability to persuade
the investor to invest in your business. It will also be measured
by facts over opinionated speculations. You will use details and
references from your chapter readings, lectures and from
referenced research. The specific grade will be measured by the
rubric provided in Canvas.
