Eco/561 Business Proposal

1670 Words7 Pages
Business Proposal Mindy L. McAllister ECO/561 January 12, 2015 David Morrison Business Proposal The proposal that follows is an opportunity to operate a snack shop on wheels. A roving snack cart reduces the time an employee is away from his or her workstation. This business will function under the name “The Snack Cart.” Further explanation of the market structure, elasticity of the product, its marginal cost, marginal revenue, and the non-pricing strategies the business owner researches to attract potential investors to develop the project and begin operating are displayed below. In addition, how the current global economy, local economy, and the current credit market conditions affect this proposed project are also reflected. The…show more content…
Once permission is granted, the independent businesses that occupy the building may not allow the Snack Cart to provide snacks and refreshments to their employees because they feel it is distracting. One idea to develop a partnership with independent business owners is to provide a place on the cart for their business cards so potential customers will see them. At the same time leave business cards for the Snack Cart in the offices. ELASTICITY OF THE PRODUCT The Snack Cart products are elastic. Consider that the purchase price of coffee increases at a rate that causes the selling price to rise by $.25. It is safe to estimate a loss of 10 per cent in sales when the selling price increases. However, The Snack Cart will not sell products that do not produce a profit of 35 per cent or more. “If elasticity is greater than or equal to one, the curve is considered to be elastic” (Heakal, 2014). The Snack Cart coffee is elastic. Since all products are purchased at the same average price and sell for the same price, it is expected that each of the products sold by the Snack Cart are elastic. Product | Cost | Revenue…show more content…
Other fixed and variable costs are 40 per cent which allows 10 per cent profit per dollar. An increase in marginal costs will affect marginal revenue. Fortunately for the Snack Cart, the marginal cost does not greatly impact marginal demand. Dedicated customers are willing to pay the price in order to have their favorite products available in the manner they have grown accustom. The purchase price of supplies and products does not fluctuate so significantly that marginal revenue is affected unless there are weather-related events which create a decrease in supply. Weather-related events may generate shortages of goods which will, in turn, cause an increase in the selling

More about Eco/561 Business Proposal

Open Document