You want to start a summer business to earn money. What will you do? You have to consider how much money you can afford to invest in this business, how much it will cost you to make each item, and how much you’re going to charge for each item. Research something that would be reasonable to make and sell with the start- up investment you have determined.
a. What is the total amount of money you are willing to invest in this business?
b. What item are you going to make and sell? Why?
c. Describe how your business will work. How much will it cost you to make each item? How much will you sell each item for?
d. Do you think your business will be profitable? Explain your answer.
a. The total amount of money I am willing to invest in this business is $500.
b. I am going to make and sell homemade candles. I have chosen candles because they are a popular and relatively inexpensive item that sells well during the summer season. Additionally, making candles allows for creativity and customization, making it a fun and engaging business venture.
c. My business will work by creating and selling handmade scented candles. To determine the cost of making each item, I will consider the cost of materials such as wax, wicks, fragrance oils, containers, and packaging. Let's assume the cost per candle is $2.50. This includes all materials and packaging expenses.
For selling each item, I will research the market prices for similar candles to set a competitive price. Considering the quality and uniqueness of my candles, I decide to sell each candle for $6.
d. By subtracting the cost to make each item ($2.50) from the selling price ($6), the profit per candle would be $3.50. Assuming I can produce and sell 200 candles during the summer season, the total revenue generated would be $1,200 ($6 x 200). Deducting the total production cost ($2.50 x 200) of $500, the total profit would be $700.
Based on these calculations, it is reasonable to expect that my candle business will be profitable. However, it is important to consider additional expenses such as marketing and promotion, as well as the demand and competition in the local market.
a. The total amount of money I am willing to invest in this business is $200.
b. I have decided to make and sell handmade bracelets. This is a good choice because it requires minimal initial investment, can be made with affordable materials, and has potential for good profit margins. Additionally, they are popular items during the summer season and can be easily customized to cater to different customer preferences.
c. In terms of cost, I estimate that it will cost me approximately $1.50 to make each bracelet. This includes the cost of materials such as beads, strings, and clasps, as well as any necessary packaging.
To determine the selling price, I will consider the market demand and the perceived value of the product. After conducting some market research, I have found that similar handmade bracelets are being sold for around $8-$12. However, in order to attract more customers and encourage sales, I will initially set the selling price at $10 per bracelet.
d. Based on the cost analysis, my business has the potential to be profitable. With a cost of $1.50 per bracelet and a selling price of $10, I will have a profit margin of $8.50 per item.
To determine the profitability of the business as a whole, I would need to consider other factors such as overhead costs (e.g., advertising, packaging, transportation), market competition, and the overall demand for handmade bracelets. However, with the low initial investment, high profit margins, and the popularity of handmade accessories, it is reasonable to expect that the business can be profitable.
a. To determine the total amount of money you are willing to invest in this business, you will need to consider your available funds and decide how much you are comfortable spending. This could be a specific dollar amount or a percentage of your savings.
b. The item you choose to make and sell will depend on several factors such as your skills, interests, market demand, and available resources. Consider researching trends and identifying products or services that are in demand during the summer season.
c. Once you have chosen the item you wish to make and sell, you will need to calculate the cost of producing each unit. This includes the cost of raw materials, manufacturing or production costs, packaging, overhead costs, and any other related expenses. To determine the selling price, you should also research the market to understand what customers are willing to pay for similar items.
d. To determine if your business will be profitable, you need to compare the cost of producing each item with the selling price. If the selling price is significantly higher than the production cost, there is a potential for profitability. However, it is crucial to consider other factors such as competition, market size, marketing and advertising costs, and potential economic fluctuations. Conducting a thorough market analysis and creating a financial projection can help you assess the profitability of your business.