Business Creation Project Over the next two weeks, you and your partner will create a business of your choosing. It can be virtually any type you want: clothing, video game, sporting goods, hair salon, etc… In order for this business to function, you need to be proficient in using several different types of software programs: Microsoft Word (word processor), Microsoft Excel (spreadsheet), and Microsoft Paint. You will need to do some research to see how this type of business works, what products are available, and how profitable the business is. For this, you will need to find a similar business in your community and interview the owner and/or the employees. In addition to learning useful computer skills, you will be learning about the math behind creating a business, including interest, loans, profit margins, retail vs. wholesale prices, etc. Here is an overview of what you will do: 1. Create a business plan using Word. 2. List an inventory of items that your business will stock using Excel. 3. Create a logo for your business using Paint. 4. Develop a pamphlet, flyer, or coupon advertising your business using Paint. 5. Research a similar business, interview the owners, and type up the interview using Word. 6. Collect all this information into a business portfolio and present your business to the class.
Your Business Plan The business plan is a document that discuss the who, what, where, when and why of you business. It helps you focus on the reasons for the existence of your business and can be presented to prospective investors (banks, venture capitalists) so that you can get the money you need to start your business. This assignment will be typed up and should include the following information: Paragraph 1: Explain what type of business it is. Describe what you will sell. Paragraph 2: discuss why you have decided to start this business. Is ther a demand for the products that you are selling? Where will the business be located? Paragraph 3: Describe the owners of the business, their expertise in this type of business (you can make this up), and how you will get money to start your business. Your business plan should be formatted with an appropriate font and no larger than 18 point. The line spacing should be 1.5 (Format, Paragraph). You should use Justify alignment so that the sentences begin and finish in the same place on either side of the document. Lobaco’s Lumberland Owner: Mr. Lobaco December 15, 2000 The business that I would like to start is a lumber store. The store will offer many different types of wood as well as accessories
like tools, nails, gloves, and other equipment related to lumber and its uses.
Richmond needs another lumber store. Many people have to travel several miles to get to a good lumber store. Therefore, it make sense to open up a store like this one somewhere in the heart of Richmond, perhaps downtown. I also plan to specialize in unusual types of woods to attract customers, since not many other lumber stores have these woods. I hope to get customers ranging form
homeowners to artists to carpenters.
Mr. Lobaco has spent many years building and refinishing his own furniture. Since he knows many things about wood, it makes good sense to open this business. The start-up money will be partly Mr. Lobaco’s own savings and partly a low percentage business loan from the Richmond City Bank, to be paid back over ten years.Business Plan Development Worksheet
Paragraph #1 What type of business would we like to start?
What will we sell?
Paragraph #2 Why have we decided to start this business?
Why does our community need this business?
Where in our community will this business be?
Paragraph #3 Who are we and what do we know about this type of business?
How will we get the money to start up this business? Choose the bank with the best interest rates according to your interest spreadsheet assignment. Community Business Information
Your partner’s name and telephone number:___________________________ ___________________________ 1. Find a store in your community that is similar to the one that you are designing and get the phone number or just visit. 2. Call and tell the manager: your name, your school, what project you’re doing, that you would like to interview him/her for a few moments. 3. Set up a time at the store for the interview. If you can’t make the interview, call and reschedule. 4. Visit the store, preferably with your partner and write down some of the different items that are available there. 5. During the visit and the interview, write down this information down as if you were a reporter. Here is a template to think of some questions that you would like to ask the store manager or employee. On the back, you will find a sample interview write-up.
Interview Questions
General Information 1. 2. 3. Inventory 1. 2. 3. Customers 1. 2. 3. Future 1. 2. 3.
The Interview Mr. John Doe Berkeley Lumber Yard On Thursday, December 6 I interviewed John Doe, the day manager at Berkeley Lumber Yard. He was nice enough to spend some time with me to answer some questions I had for him. Mr. Doe has worked at Lumber Yard for seven years now and he still loves it. Sometimes it’s hard for him to get up in the morning but he says he still enjoys it. As he said, “I especially like helping out the customers. I like giving out advice.” He makes enough money to pay for his house and feed his family and the health benefits that his boss gives him are very good.
The most popular items at the store are the specialty woods that come from different parts of the world. Chain saws are popular during the summer months because “lots of people are cutting down their trees during that time of year.” The store has a computer spreadsheet that keeps track of what the current inventory of items and they can tell right away what they are running short on so that they may reorder. He showed me the program and I noticed it looked much like the one I am using for my business project.
The customers that come to the store are usually homeowners or carpenters (people who build houses). He sees the same people over an over again, so he knows many of them by their first name. They trust his opinion.
In the future, John would like to start his own business, although he is not sure whether it will be something about wood or if it will be about music, his other love. He would also like to go back to college to finish his degree in music. He thinks that Berkeley Lumber Yard will grow over the next few years. In fact, there is talk that they might open another store in Oakland.
Your Inventory Worksheet This worksheet will help you create an inventory, or list, of items that you will sell. Fill in as much information as you can about each item that you will sell. You should have between 15 to 25 items to sell.
Item Number Retail Cost Wholesale Cost (66% of Retail Cost)
Item
Number
Retail Cost
Wholesale Cost (66% of Retail Cost)
Your Inventory Spreadsheet
Your spreadsheet will look something like this:
Item 2x4 pine Oak 4x6 Mahogany 4x8 Small nails Large nails hammer Number 20 12 10 1000 500 25 Total Cost: Wholesale Cost $1.50 $34.50 $56.00 $0.03 $0.07 $5.00 $97.10 Wholesale Total $30.00 $414.00 $560.00 $30.00 $35.00 $125.00 Retail Cost $2.25 $51.75 $84.00 $0.05 $0.11 $7.50 Retail Total $45.00 $621.00 $840.00 $45.00 $52.50 $187.50 Total Profit: Profit Margin $15.00 $207.00 $280.00 $15.00 $17.50 $62.50 $597.00
Notes: Font size: Centered. Print in Landscape form (File, Print, Properties)
Inventory Spreadsheet Worksheet 1. You and your partner took out a loan from the bank for $20,000. Create a formula that will compute the sum of your Wholesale Costs to see if you are under this amount. Place this formula under the column for Wholesale Cost. A. What formula did you use?
B. Adjust your number of items so that your Wholesale Cost Total will be just under $20,000. What other numbers changed when you did this?
2. Two months after your Grand Opening, you find that your prices are too high and customers are not buying your products.
A. What formula in your spreadsheet will you need to change in order to lower your prices?
B. What did you change it to?
C. How did this affect your profit margin?
3. Most cash registers have a program in it that will calculate the total cost of an item including tax. Using the information from your current spreadsheet file, create another spreadsheet just below that one that will: A. Calculate the 8.25% sales tax on the retail total of each item. B. Calculate the Total Cost of each item including tax.
EXTRA CREDIT!!!! 4. Assume that you hire three employees that work a total of 40 hours per week for $7 per hour. A. On the same spreadsheet file, create a separate Employee Spreadsheet that will: Calculate each employee’s monthly wages. Calculate the total employee wages. Subtract the employee wages from your total profit margin.
Business Project Checklist
Title Page (printed out) include the name of business, owners’ names, ficticious address, and date of Grand Opening—5 points Table of Contents (printed out)—5 points Business Plan (printed out)—10 points Inventory Spreadsheet (printed out)—20 points Inventory Spreadsheet Worksheet—20 points Interest Spreadsheet Questions—20 points Coupon, Flyer (printed out)—10 points Interview Write-Up (printed out)—10 points
**Total of 100 points. Business Project Assessment and Evaluation Use the following spreadsheet to answer the questions below.
1 2 3 4 5 6 7 A item jeans shirt shoes socks B number 25 20 15 45 C wholesale cost $24.50 $12.50 $55.25 $2.00 TOTAL D wholesale total $612.50 $250.00 $828.75 $90.00 $1,691.25 E F G retail cost retail total profit margin $34.30 $857.50 $245.00 $17.50 $350.00 $100.00 $77.35 $1,160.25 $331.50 $2.80 $126.00 $36.00 TOTAL $676.50
1. What does “wholesale cost” mean? (5 points)
2. What does “retail cost” mean? (5 points)
3. What does “profit margin” mean? (5 points)
4. What formula was used to calculate the wholesale total of the shoes? (5 points)
5. What formula was used to calculate the profit margin of the socks? (5 points)
6. What formula was used to calculate the TOTAL wholesale totals? (5 points)
7. Why would business owners use a spreadsheet? (20 points)
8. Spend the next 20 minutes doing an evaluation of your business project. Include in your writing what you did, what you liked, and what you learned. (50 points)