Business Presentation

BUSINESS PRESENTATION

Lotte Randall

Starting Position

• For several years I have been building and selling computers to friends and family whilst working for a firm that does the same thing.

• I have decided to start running my own business full-time. However, I currently earn £1,500 a month, and this cannot be reduced by any more than £500 in order to pay my bills, and personal expenses.

• Therefore I have had to create a situation business plan to calculate my approximate expenses and help me to foresee any events that could jeopardise my business being successful.

Designing the ProductBudget = £1,0000 Total Cost = £567.08

• Complete PC Tower can cost anything from £100 - £1000, therefore reasonable budget for all the parts is £500

• Provide a range of Towers: 1GB – 3GB

• Initial Product – 1GB (save on start-up costs)

• Future – Graphics Card Installations & Built-In Wireless

(Source: Cybertron PC, 2009)

- This CybertronPC Quantum Series XR9020 Tower is an example of the end product at £472.28.

PC Monitor, Keyboard, Mouse

PC Screens Generally cost £60+

Range of sizes available

Majority of parts will be “bulk-buy” therefore start with this screen size

18.5” monitor costs £79.97 and includes built-in speakers.

(Source: DSG Retail Ltd, 2009)

(Source: Scan Computers Intl Ltd, 2009)

Microsoft Keyboard - £11.47Mouse - £3.36(Source: 8StarShop.com, 2009)

How Long Will it Take to Complete?

2-3 days unless problems arise: Installation problems Inferior quality of products Construction malfunction

Cost of the product – Will it make me a Profit? Estimated build cost for one PC - £800; Sold each product for £1000 – need to sell

at least 5 in one month to make required profit (£1,000)

Ease of Producing the Product

Previous experience of building computers - should be easy

With increased production & upgrades, more knowledge to be acquired.

Is Relevant Support Provided? Most parts from separate manufactures;

specific manufacturer has to be contacted for each part

No overall support

IT Support should be organised

How Often to Upgrade?

Depends on Customers’ needs & competitors’ products:

Regular surveys – How successful products are with customers & what they expect from future products

Review Competitors’ product list – website, brochure etc

Launch New Products in Foreseeable Future?My intention is to do so; however this will all

depend on customer requirements and budget.

Purchasing Strategy

Ideal situation: Pay suppliers after receiving payment by customers; Consider the different terms of credit agreements:

Current Supplier – offers 60 day credit agreement. Good relationship, with delivery commitment and trusted product quality

Another Supplier – offers 90 day credit agreement. Wary of their commitment to deliver on time and quality of products

With business just starting, best solution is to stay with current supplier – unreliable suppliers will cost time & money.

Research other suppliers and bulk-buying in future

Producing the Product

How many units to produce and stock?

Depend on market research & pre-orders

Don’t want to produce & stock too many at once – Ties up capital

Do not want to result in delayed availability to customers

Sensible amount of whole computers to stock – 2

How to produce the product? (2 ways): In Batches – more cost efficient; makes tailor making

product more difficult One at a time – less cost efficient, more time

consuming; increased product quality.

Budget = £2,000

Buy in Bulk?

Better as a purchasing Strategy Cheaper Enough stock for potential order growth

~Parts take up room and financial capital~

Production after Business Expansion?

3 methods:

1. Sub-contract to another company – saves time & effort

2. Buy in products – more expensive, quality?

3. Produce myself – enough room? Assured quality

Delivery

Damage en-route? Delays causing

unsatisfied Customers

Control whole production process

Create personal touch

Sub-Contract to Courier Service

Deliver Products Myself

Quality Control

3 Methods

1. Random Testing – checks proportion; quick however not completely reliable

2. Inspection – time costly; possibility of missing some faults

3. Soak Testing – takes up a lot of time; will ensure every fault is repaired = customer satisfaction

Raising Finance

Current supplier offering components at a discountedcosts; do not have the funds – need to find in 4 weeks...

Several ways of raising finance; points to consider: Cost Elements – Consider the cost of borrowing;

interest rates applicable on all loans.  Security – Lenders want security (house, car). Can I

afford this & which assets do I use? Shares Available – Sell shares of business. Lose

some control & have to share profits

Different types of Finance

Unsecured loan. Agree a limit with bank manager on how much you can go overdrawn on current

account (Team Technology, 2009). Advantages – “An overdraft is there when you

need it and costs nothing when you don’t. They are easy to arrange, providing a good cash flow backup with minimum fuss” (ROK Ltd, 2008).

Disadvantages – Carry interest and fees that are often at a much higher rate that with loans. If you fail to make payments the bank can recall the entire overdraft.

Overdraft

Guaranteed Loan

If you don’t have any security then an unsecured loan may seem the only option. However, if your parents have a good track record at the bank and own their property: some banks let them guarantee the loan.

Advantages – no worry of losing vital assets Disadvantages – will have to rely on my

parents at the start of my own business

Venture Capital

A Venture Capitalist provided funding in exchange for the share of the business.

Advantages – No debt associated with the finance Disadvantages – Have to share proceeds.

Decision

There are many other types of finance that I could use but have decided to find a venture capitalist as this will provide me with security of constant funds without interest – which I cannot currently afford to

pay. I can in the future, buy back these shares.

References

Cybertron PC. 2009. Cybertron PC: General. [Online]. Available from:http://cybertronpc.amazonwebstore.com/CybertronPC-Quantum-Series-XR9020-Tower-ServerIntel/M/B000WG3VBM.htm?traffic_src=froogle&utm_medium=organic&utm_source=froogle-GB&id=uk [Accessed 30/04/09]

DSG Retail Ltd. 2009. PC World: Packard Bell Viseo 190W 18.5" Widescreen PC Monitor. [Online]Available from: http://www.pcworld.co.uk/martprd/store/pcw_page.jsp?BV_SessionID=@@@@0326405198.1241102812@@@@&BV_EngineID=ccgeadehdmklkljcflgceggdhhmdgml.0&sku=158272&page=Product&fm=null&sm=null&tm=null [Accessed 30/04/09]

ROK Ltd. 2008. Bizhelp24: Overdraft Finance. Advantages & Disadvantages [Online]Available from: http://www.bizhelp24.com/business-finance/overdraft-finance---advantages-and-disadvantages.html [Accessed 01/05/09]

Scan Computers Intl Ltd. 2009. Scan: Computer Hardware [Online]Available from: http://www.scan.co.uk/Product.aspx?WebProductID=672909&source=froogle [Accessed 30/04/09]

Team Technology. 2009. Finance Alternatives: Other Ways to Raise Finance [Online]Available from: http://www.teamtechnology.co.uk/loans-guidebook/finance.html [Accessed 29/04/09]

ENDAny Questions?