Overview of the business:
Name: Esther Marie Boutique
Location: 30 minutes outside of Christchurch city, New Zealand, in the township of Rangiora. Currently home based.
Hours of operation: Between 9am to 7pm, 7 days a week with hour depending on products.
Types of products and services: Esther Marie Boutique offers the services of sewing (mending, alteration, costume and fashion ware creation and hire) and Embroidery (logo design and application, lacework, craft items: bookmarks, candle covers etc., bags and jewellery and accessories)
Category of business: Merchant (retailer) and online
1. Three financial objectives for Esther Marie Boutique.
Short-term objective (6 months): Setting multiple advertisement channels to generate sales
1. Sales objective: provide customers with multiple ways to access the business to view sales products.
2. Gross profit objective: source suppliers and expenses for multiple suppliers.
3. Net profit objective: identify the appropriate cost’s related to running the business and purchase of supplies
1. Figures for each advertisement channel
2. Price lists, terms and conditions of suppliers
3. Realistic and actual costing and price comparisons of each supplier
Medium-term objective (2 years): grow sales and customer bases
1. Sales objectives: promote business though channels and offer loyalty schemes to repeat customers to grow outreach.
2. Gross profit objectives: discuss and arrange trade credit with suppliers
3. Net profit objectives: review suppliers to find cheaper alternatives/ special discount e.g. buying in bulk
Measures: (Same as above)
Long-term objective (5 years): pay debt and increase work capacity and more equipment
1. Sales objectives: create more products that will interest customers, product mix. Generating more demand
2. Gross profit: invest in new suppliers and latest equipment to utilise new technologies.
3. Net profit: new suppliers
Measures: (Same as above)
2. Required amount of finance to manage the set up costs and cash flow for the first financial year using the set up cost and cash flow template.
(Templates located in the appendix)
For the first financial year beginning the 1st of April 2016 to 31st of March 2017. Esther Marie Boutique will require $45,000 in total to cover the set up cost of $9500.00 and expected cash flow projection of $34,844 to maintain the business for the first year.
3. Two available sources of commercial funding Esther Marie Boutique and the cost of obtaining the required finance.
1. Family and Friends:
Advantages-you have a personal relationship with the lender, the monetary amount could come in the form of a gift or donation to the business.
Disadvantages- loan repayment may be expected even when not discussed which may incur interest either in a lower form or over a longer period of time. If venture isn’t successful could damage the relationship. And they may expect a return on their...