Description
This signature assignment is designed to align with specific program student learning outcome(s) in your program. Program Student Learning Outcomes are broad statements that describe what students should know and be able to do upon completion of their degree. The signature assignments may be graded with an automated rubric that allows the University to collect data that can be aggregated across a location or college/school and used for program improvements.
Purpose of Assignment
The purpose of this assignment is to allow the student an opportunity to apply their understanding of cash flow management, break-even analysis, and short-term and long-term financing in starting and growing a business.
Assignment Steps
Resources: OECD Database, Corporate Finance
Prepare a 12- to 15-slide PowerPoint® presentation with speaker notes requesting initial funding of $500,000 to start and run a start-up company. The proposed start-up company could be an existing business model (coffee shop, pet store, etc.) or could be something entirely new and exciting.
Create the presentation in the following format, with at least one slide to cover each of the following areas:
- Title Page
- Table of Contents
- Executive Summary
- Information about the Industry
- Marketing Plan
- Competitor Analysis
- 3 Year Income Statement (Profit & Loss) Projections
- Include your assumptions for why and how you will achieve your sales growth and what significant expenses and investments you expect to incur to achieve your revenue goals.
- 3 Year Proposed Funding Schedule (Sources and uses of the funds received.)
- Break-Even Analysis
- Academic and Business References
Review the following scenarios and assumption, and explain how it impacts your decision to expand:
- After Year 3, the investors are interested in your company expanding internationally to possibly outsource labor or to reduce manufacturing costs. What countries would you expand to first, and why? What factors would you need to consider in making this decision?
- What is the corporate tax rate in the countries you are considering expanding your business to, and how will that affect your decision to expand globally? (Use OECD Database or another resource to determine the corporate tax rate).
- The investors want to see a decision tree detailing the decisions you would make if you received $300K now and $200K at the end of three years instead of $500K up front.
- The investors would like your team to provide advantages and disadvantages of using debt financing versus selling company stock to raise capital for growth.
- Briefly explain the venture capital process. Does it make sense for your company to raise funds through venture capital?
Format your presentation consistent with APA guidelines.
Explanation & Answer
Attached.
START-UP COMPANY
REQUEST FOR $500,000 FUNDING FOR A COFFEE
SHOP AND FAST FOOD RESTAURANT
Table of Contents
Executive Summary
• The proposed start-up company is a fast food restaurant/coffee shop. The initial funding required for to start and run the restaurant is
$500,000. The vision is to run a coffee shop alongside a fast food restaurant for diversity. There are milestones set for the next two to three
years and the next one and a half years. For the short term milestones, they are meant to result in an increase.
• The company’s investment thesis will focus on particular technology areas and vertical markets making the financial model credible.
• Validation of the selling proposal for the company is important to demonstrate value that matches the customers’ perspectives on their wants
and preferences.
• The product market focus has to match the profitability of the startup idea showing significant progress while investing personal resources.
• The company considers the need to generate a lot of cash to service debt and the ability to negotiate fair valuations
Information about the Industry (s)
•
The most successful coffee chains in the United States operate through licensing agreements
•
The industry exceeds annual sales of $19billion with an average of 30,000 stores only in the United States.
•
Demand in this industry is driven by consumer taste and personal income.
•
Fast food restaurants are a major competitor for the industry despite the diversity and advantages that come with finance, purchasing and marketing.
•
The special eatery industry offers a range of products making it more profitable than other industries
•
The fast food restaurant alongside the coffee shop combines the special eatery industry with the fast food industry.
•
The fast food industry is ever-growing and has a specified worth of close to $200 billion.
•
The competitive nature of the industry produces household brand names with a review of each restaurant’s annual satisfaction ratings.
•
The excellent ratings in these two industries are abound to result in a step function increase
Marketing Plan
• Focusing on the start-up as a combination of two industries, the mission statement is to have extraordinary value for the customers’ needs and
preferences while offering good quality products.
• The potential clients for the company are such as the neighboring corporate firms and the college students in the area.
• The services provided differ from the normal eatery industry and fast food industries. Merging the coffee shop with a fast food restaurant
means that there are diverse products at one stop.
• The marketing strategies for the company include advertising, which is excellent in lending credibility. The other strategy is using press
releases and participating in trade shows to ease networking.
• The services from this company benefit the user by having all the products centralized.
• There is a potential to acquire skills and resources that are dependable to reach the set marketing goals.
•...
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