Question

As for the sales forecast for Year 1 through Year 3, these are some important variables I will go to consider for sales:

Economy: The economic condition of the city, the province and the country are variables I need to consider for a sales forecast. If conditions are poor, people will spend less money on consumption. If economic conditions are great, then more people will have extra money to spend.

Competition: I need to consider the level of competition I have around me. If new competitors enter the market, that can affect my sales forecast drastically. The same goes for if my competitors drop out of the market.

Inflation: Inflation is something that effects every country, and effects the economic conditions. So, I need to consider trends of inflation (and inflation forecasts) in order to make a sales forecast.

Political Environment: I need to consider the political environment of the city, the province and the country. The political environment affects the economy and business law. If there is an election within my sales forecast period, I need to consider the potential outcomes of each election.

Seasonal Demands: I need to consider seasonal demands and trends because each season has a different demand for products. Summertime is going to require cold beverages, meanwhile winter will have a demand for hot beverages. Each season will also affect overall sales. People spend more money in the summer. A sales forecast will have to consider all these seasonal demands and changes into the model.

Where to obtain data: Government websites, Market research firms, Political experts, Stock Market data, Google Maps (search for competitors) or Drive around my area (locate competitors visually), City database, Economic analysts

Part 1

· Are these considerations feasible? Would you change or add any considerations?

· As a lender (someone who commits capital with the expectation of receiving financial returns) to this company, what are some numbers you want this entrepreneur to show you before you make your decision to invest your money?

The biggest challenges throughout the planning process is determining start up costs, determining inventory and determining the location of the store. The start up costs are a big challenge due to there being a number of variables such as how much inventory is smart to start off with, how much to pay in utilities (can easily fluctuate), and how much to pay in advertising the store to customers. Determining inventory is also a challenge because orders must be placed to keep up with inventory and determining a schedule for that is based on revenue, but during the planning process revenue can only be projected and not consistently known. Determining the location of the store is also a challenge, it is an extremely important decision that will make or break the success of the store. Calculating how many customers are nearby, as well as type of income (lower-class, middle-class, upper class, etc.) is also challenging.

The growth potential of my business is tremendous. I view after a few months, for there to be a solid foundation for revenue. The first few months may be tough because the public either doesn’t know about the store, or don’t have a trust built with the store yet. Once I am established, I see my store serving the community with well needed convenience products and establishing a

casual customer base. Once I’m established after a few months, I expect revenue to climb and stabilize. After a few years I expect to be financially in a great position. Some profits can be diverted to upgrades for the store, improving customer experience (maybe experiment with new and diverse products). After a few years, I see myself expanding by buying other Circle K franchises to open or try to buy established stores from owners. This would require saving up a lot of the profit but in the long run it is a great investment in my opinion.

Part 2

1.This entrepreneur mentioned some big challenges he/she would face when starting this business. Do you agree? Explain your decision

2.Evaluate the growth potential of the business. Would you agree with this entrepreneur’s vision? Why or why not?

hello chegg, please provide references from where you pick the data to answer these questions

Answer 1

Answer Part 1:

The considerations that have been noted by you are feasible however; there is a little scope of addition. You should also include the market research for analysing the taste of the customer, their specific demand of specification in the product, their values and perception towards the quality of the products and their attitude towards purchasing of the product. You should also include the data of the competitor and that of the substitute products so as to know the effectiveness of the competitor and the substitute product and its market share.

Before lending i would like to see the financial statements of the company to analyse the company’s gross and net profits over the years and the performance of the company by analysing its revenues and savings. I would also analyse the debts and liabilities of the company. I would ask for business forecast and would like to know how much business, company is expecting in the future course of time.