Assignment

Part 1: Breakeven Analysis

You are considering the start of a small business that sells generator gaskets. According to your market research, you can sell each gasket for $12. Your fixed costs for the business are estimated at $35,000 and you estimate your variable costs to be $6 per gasket.

Required:

1. How many units will you have to sell to break even in the business? Calculate the breakeven point in units, and then in dollars.

2. In order to make the business a worthwhile activity, you require a $20,000 profit. How many units would you have to sell to make this venture worthwhile?

3. Explain how breakeven analysis can be useful to the person starting a small business and/or to an existing small business.

Part 2: Business Plan, Term Project:

Required:

You will be creating a business plan for a small business. You can begin your research for the project by looking at the information on the Small Business Administration Web site.

Decide what business you will be starting, which organizational style will be best for your business, and what various funding sources are available to you. Document your initial thoughts on funding, knowing that this might change as the course progresses.

Choose a business that manufactures a product in some quantity such as furniture, toys, or small appliances such as toasters, telephones, or electronics. The business cannot be a home-based business or a service-based business. If you are having trouble deciding on a business, you may use a business that manufactures the newest technology in handheld computing devices.

As you progress through the project, you should document all resources used while starting your business. For example, the Small Business Administration is a good resource and most states have resources for small business owners.

For this week, you need to document at least 3 resources, including the SBA Web site, which you used to complete the assignment. List the resources and explain briefly how they were useful to you in your research.