Homework ( 25 word reply to each student response)

timer Asked: Apr 18th, 2015

Question description

Original question:

Your Own Business

Assume that you are going to start a small business of your own.

Describe the business and, utilizing the concepts of this unit and the earlier units, discuss:

  1. what costs you would incur;
  2. what competition you might experience;
  3. how you would determine the price you would sell your product; and,
  4. how much product you would produce?

Student 1 response

Hello Class and Professor,

If I were to start up my own business I would start up an accounting firm because I am very good with math.  When starting my own business I would need to receive a business registration and license which do have fees.  I would need to find a location.  With the location I would have overhead costs such as rent, utilities, and furniture.  If I were to choose to have a website I would also need to have a domain name, hosting services and designers.  I would also have equipment expenses.  I would need to buy computers, phones, copy machines, office supplies, software programs, and displays.  When I start up my business I need to advertise to obtain the clientele I need to advance my business.  I could hire a consultant, ad service, business cards and brochures.  I would also need to figure out my employee cost.  It cost to maintain my staff.  If I need to hire an independent contractor to do work in the location I need to figure that cost.  Also I would need to recognize the cost of the lawyer helping with all the paperwork. 

No business operates without some type of competition.  The competition I would have is the already established accounting firms.  The type of competition I would see if pricing, advertising, discounts and etc.  To be better informed about the other business I would need to check out their place, and talk to their customers.  I could look at their advertisements to see what the competition is emphasizing about their business.  I could purchase mailing lists and directories to obtain more clientele. With checking out my competitor’s website I could see what they are offering. 

Pricing the products would be through the use of cost-plus pricing.  The price would be determined by the cost of the accounting paperwork for my clientele.  I would need to do research to see what the price is going for.  Then conduct my price to make sure I am covering my variable expenses and making a little profit.

In order to know how much to produce I would need to look at the marketplace to see how much the accounting firms are charging and how much need they have.

Student 2 response

Hello Class,

I think that this is the perfect discussion because because I plan to open a small business when I’m done with school.  To start off before expanding I will be opening a personal fitness studio. The main costs that I will incur will be the cost of fitness equipment. I will not incur the cost of building rent because I already own a building that is 4000 square feet. Other costs that I would incur would include the cost of market research and consultants such as a lawyer or accountant (Beesley, 2015). I would business license, the cost of utilities such as electric and water. I will also need the internet for the business computer and a phone line put in to send and receive faxes. I already own several computers so that will not be included in the cost. To advance my business I will need to advertise so this in itself will be another cost which will include business cards, ads in the local newspapers, a window decal on my vehicle and brochures. Last but not least I will need business insurance because you never know what can and will happen. It is better to be protected. I may have to get a loan from the bank to payoff necessary business expenses until my business is self-sustaining (Beesley, 2015).

The competition that I would most likely experience is that of gyms and/or fitness centers that may offer a personal trainer within their facilities and other personal trainers who are already established in the area. When determining the price that I would charge for my services I could visit fitness centers and gyms that offer personal training and see what they would charge customers to do the same thing that I plan to do. I can also visit websites of my competitors and find out their prices. But because many individuals who want to lose weight or live a healthier lifestyle may not have that much disposable income, I have come up with the idea to implement pricing for my services on a sliding scale which will be based off a person’s income and lower than the price of my competitors.

Since I will be operating a fitness business I will be producing a service instead of a product. The amount of service that is provided will greatly depend on the demand from my customers. The more customers that I’m able to gain the more the services that I offer will increase.

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