Homework answers / question archive / Let’s Throw  a Business  Party A              case      study     to           learn     how       to           project  sales,  research             and        estimate             expenses,           and        to  calculate             projected            profit/loss

Let’s Throw  a Business  Party A              case      study     to           learn     how       to           project  sales,  research             and        estimate             expenses,           and        to  calculate             projected            profit/loss

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Let’s Throw  a Business  Party

A              case      study     to           learn     how       to           project  sales,  research             and        estimate             expenses,           and        to  calculate             projected            profit/loss.                       

This          analysis will        include  the         development      of           an   income  statement           and        students              will        conduct a   break    even      analysis.                           

The project     will        require you        to           make    a            profitable    party     plan      as          a            business             consultant,    determining       whether             the        party     is            financially    viable.  Please   be          sure      to           review  the        assignment    to           determine          the        requirements.   To          determine    whether             your      idea       for         a            party     is    practical,            you        will        need     to           research             the    costs     of           party     finding  costs     in           the        industry    and       similar  parties  and       venues as          a            way       of    'benchmarking'.              You       will        then      need     to           think    critically              to           answer a            series    of           financial    questions           in           paragraph          form     (see       below).

Steps to  build  the     Income     Statement   

Income Statement         (also      known  as          Profit/Loss         Statement)             

Step    1:           Determine         the        Projected           Revenue             -            (#           of           tickets   sold       for         the        party     multiplied            by          the        price     charged              per        ticket).  You       will            need     to           review  and       utilize    one       of           the        sales            projection          methods             from     the        Prezi      overview            for         Financial             Analysis.                          

Step    2:           Determine         the        major   expenses            (list        each            type      of           expense              and       how      much    you        think            it            will        be).       Expenses            should  be          listed     as            “Cost     of           Goods   Sold”     –            these    are        your            variable              expenses            for         the        party     that            change based   on          the        number              sold       (e.g.,     food).            Then,    the        remaining          expenses            should  be          listed            as          “Operating         Expenses”          –            these    are        your            fixed     expenses            for         the        party     that       remain the            same     no          matter  how      many    tickets   you        sell.      

Step   3:           Profit    or          Loss?     Take      your      revenue              and    subtract              all          of           the        expenses.           If            there    is            money  left        over,     you        have      a            profit.    However,           If            you        have      no          money  leftover,    and       you        actually have      more     expenses            than    revenue,             you        are        losing    money. You       may       need    to           consider             either    (1)         raising  the        price    charged              per        ticket,   or          (2)         lowering    expenses.

 

Answer          the        questions         below  in           paragraph           format.              In           order   to          answer              the           questions         below  you       will       need    to          conduct           research           and       make   assumptions.  Please clearly           indicate             all          assumptions   you       make   throughout           you       answers            to          each     question           and       cite           any       resources         used     using    footnotes.        (Hint:    The           lecture material             from     our        financial             analysis           module and       the        4ps        of           marketing          module will           be          helpful  in           conducting        this        analysis).            Make           sure      to          use        PICK      Analysis              in           preparing           your      submission!       Your      paper    should  be          2-3        pages           long,     single    spaced.

          

1. Determine            the        sales     price     for         a            ticket   to    your      party.   How      did         you        come    to          this        price?    Remember        to          use        the        pricing  strategies           and    objectives          from     the        “pricing”            section of           our    marketing          overview,           Ch.        13.        You       also       will    want     to          “benchmark”    against your      competition:     Who    are        three    competitors      and       what     are        they    charging?           What    is            your      competitive       advantage?    Tip: Use pricing strategies and objectives from Learning Module 10 (pricing) in the text.

   

2. Identify,  research,           and       estimate            major   expenses    for         your      party     to          calculate            what     you    expect  the        costs     will        be.                       You       should  get    creative              here      about   what     you        need     for         your    party     (e.g.,     security,             a            band,    food,     etc.).    Determine         whether             the        costs     noted   are        fixed    (operating         expenses            that       do          not        change no    matter  how      many    tickets  are        sold)     or          variable    (costs   of           goods   sold,      which   change based   on          the    number              of           tickets  sold).    (e.g.,     Staples charges    $5          for         a            roll        of           tickets).             

   

3. Using        this        proposed           pricing  structure            and    expenses            for         the        first       year,     calculate            the    break    even     point    -             the        number              of    tickets  you        need     to          sell        to          break    even      and    the        revenue              needed to          break    even.                   Use    the        breakeven          analysis              information       from     the    “pricing”            section of           our        marketing          overview,,    and       the        activity available             under   the    corresponding  learning              module 10          to          help      you    understand       how      to          conduct              this        analysis.                 

          

4. Identify    a            city       and       venue   for         this       party    in    the        state     of           Maryland,         supporting         your      choice    using     population         data      (HINT:   U.S.       Census Bureau    website)             and       additional          information       that    supports            your      reasoning.                      

          

5. Based       on          your      target   market,              and       using     sales    projection          methods            from     the        financial    analysis              learning              module 12          Prezi     overview,    project the        potential           sales     (revenue)          for         this    party.   Will       it            exceed your      break-even        point?  Tip:    Make    sure      to          use        a            strategy              from     the    prezi     overview,           such      as          the        “build   up”    approach.         

          

6. Using        the        revenue              information       collected            and    the        expense              estimates,          prepare              an    income statement          (i.e.,      profit/loss          statement)        to    calculate            the        projected           profit/losses      in           year    one       for         this        business.            Tip:        Learning    Module              12          can        be          used      to          help    determine          how      to          build     an          income statement.                            

Should we       throw   this        party?  Why      or          why       not?    Use       the        answers              to          the        preceding    questions           to          answer this        question,           supporting    your      reasoning           with      the        financial             information    collected.