Sky has an excellent vision for her business and career. The decision to help achieve her quest in career and business requires detailed, well-informed, and proper analysis of all the available options to serve her interest in business and career. It is important to note that Sky closing his business for career purposes is not good (Gherghina, et.al. 2020). Therefore, she needs advice on maintaining the business at a low cost as she continues with the school. This paper will cover an analysis of the given information to help arrive at the best conclusion that will help Sky make a good and lasting decision.
The business is small, and Sky is beginning to find more interested customers, which shows the business can expand. When she buys quality skateboards at $50, uses $10 for value addition, and finally sells the item at $100, she will profit $40 for each piece. The profit is reasonable to pay for Sky’s time making the customized skateboards. The main aim of the business is to ensure it is making profits (Gherghina, et.al. 2020). If clients ordered personally designed skateboards, it would be okay provided the profits are good and reasonably sufficient for the energy employed in work. The new skateboard value addition business is a good idea that will require proper planning and financing before starting. However, the business’s profit is good and sets a pace for business growth.
The Sky started the business by painting skateboards for clients as per their desire and order. This was a good start that helped her realize her service to society, especially recreation. Some of the cons include that Sky cannot offer her services to people who do not own a skateboard. All her clients must first own a skateboard, to which Sky only adds value. It is a disadvantage that she cannot attract other clients unless they see the paintings on other clients’ skateboards (Ritz, et.al. 2019). Sky will also have a lot of time when she has nothing to do waiting for clients to bring their items for painting, whereas he could use the time to paint new skateboards to sell them at a profit. On the contrary, painting clients’ skateboards is an advantage since Sky will not need money to buy capital and wait long to get returns.
The qualities of putting up and maintaining a good business are important for Sky to decide on the next step in her business. The first requirement is offering the best skateboard painting to all her clients to market her services. Sky needs to be consistent with her work to have services anytime and in good time. Proper planning is required to ensure that the financing and activities of the business will not affect Sky’s desire to pursue her career. Planning should focus on maximizing profits and flexibility while minimizing costs and time spent (Martin, et.al. 2020). Marketing the business ensures that Sky achieves the best outcome in business and career.
The marketing strategies Sky and her friend are considering are all good, but in this case, they must pick a cheap, easy, and comprehensive coverage marketing strategy. It is expensive to print marketing newsletters at $300 a month and time consuming to distribute. However, Sky can adopt the strategy to distribute when she does her other activities from place to place. The business can advertise through online platforms to help reach news consumers and remind previous clients (Ritz, et.al. 2019). The first and most suitable marketing strategy is using digital online platforms because they are free, can be shared, and reaches many people at a time. Marketing through social media and other online platforms is time effective and economical in boosting skateboard sales every month.
Sky needs to know the importance of keeping clear records of her business activities to ensure she spends time and money on necessary activities. Records help sole proprietors track business activities and make taxation and business expansion calculations easier (Martin, et.al. 2020). She needs a retail space and machinery. In the analysis below we are comparing the costs of picking a retail shop, hiring versus buying the machines and taking a bank loan versus a friend’s offer. Opening a retailing space at $2000 a month is a requirement.
The expected sales in 2023 are 400 skateboards a month which is an increase. We can conclude she can get money to pay the business rent.
Leasing the machine is $200 a month for 5 years (60 months) i.e. $200 * 60 = $12000. Therefore, we conclude that buying the machine is better since it is $2000 cheaper than leasing.
Borrowing money from the bank to buy the machine has a 5.75% interest rate. Therefore, if it is simple interest, depending on the time she will agree pay the loan, Sky will pay 10000 (1 + it) i.e. 10000 (1 + 0.0575t) where ‘i’ is the interest rate and ‘t’ is time in years which she ought to pay the loan. This implies the loan is time bound and she will be free after payment.
Conversely, a friend can fund Sky at the cost of 30% of every interest the company makes for as long as the partnership lives. This is an expensive option compared to borrowing from the bank. Therefore, we conclude that taking a loan from the bank is cheaper and more convenient that friend’s funding. The friend’s funding plan also denies Sky the privilege of enjoying the advantages of a sole proprietorship (Aldous, 2018).
Sky should take a single loan covering school fees and buying the machine from the bank since it is cheap. She can start paying back the loan in bits from the business as she awaits employment after graduating and expanding the business when she has her career done. The best combination of choices for Sky is leasing a retail shop, increasing sales, taking a loan from the bank and buying the machine for her business and career (Aldous, 2018).
Sky will have maintained her business through school and get better earnings after school, which would support her business. The decision of being funded at the cost of 30% ownership of the business might cause regrets later because it would be informed by a temporary situation (Martin, et.al. 2020). Sky is likely to earn $25 per hour after graduation, assuming she works eight hours a day, totaling $200 a day. If she works for 25 days a month for 11 months, she will earn at least $5000 monthly, which can help her pay off the loan and support her business for the first three years. The pay will keep improving, and business, on the other hand, will grow if she maintains business discipline.
Sky needs to be focused, professional, consistent, good leader, and well-informed on business trends to succeed in her quest of achieving business success. Sky should take charge of her time to maximize her studies and keep her business running with little time. Time discipline and focusing on the goal are very important to keep the business and succeed in the career studies (Gherghina, et.al. 2020). She also needs to be trustworthy, respectful, and fair to her clients, taking responsibility where need be, with integrity and honesty.
Thank you
Olivia Johnson
References
Aldous, M. (2018). Business ownership and organisation. In An economist’s guide to economic history (pp. 167-174). Palgrave Macmillan, Cham.
Gherghina, Ș. C., Botezatu, M. A., Hosszu, A., & Simionescu, L. N. (2020). Small and medium-sized enterprises (SMEs): The engine of economic growth through investments and innovation. Sustainability, 12(1), 347.
Martin, J. D., Keown, A. J., & Titman, S. (2020). Financial management: principles and applications. Prentice Hall.
Ritz, W., Wolf, M., & McQuitty, S. (2019). Digital marketing adoption and success for small businesses: The application of the do-it-yourself and technology acceptance models. Journal of Research in interactive Marketing