Sources of Revenue for the New Company - Assignment Example

a. What will be some sources of revenue for the new company? What do you think will be some associated costs? Do you think the new company will be able to make a profit? Explain your thoughts. Being a coffee shop the new business can expect revenues from selling various types of coffee and other food items such as doughnuts, pastries and cakes. In addition to being a street store, the company can innovate by providing delivery services to both houses and offices in the neighboring areas. When the new company is being opened up, it will have to encounter a number of start up costs.

These costs will consist largely of new equipment that the company will have to buy up to provide production and hosting for customers. In addition, other costs will include the materials that will have to be used to manufacture coffee and other food items. The new company will have to invest in coffee roasters, mixing and blending machines, a refrigerator, baking machines (if the company chooses to bake its own products) and furniture for hosting the clients. Furthermore, the company will have to pay for the security and rent of the shop they occupy along with some renovation costs.

In terms of materials, the company will have to buy up coffee beans, cream, milk, flour, sugar and other such consumables. Other than these costs, the company will have to look into recurring expenditures such as costs of utilities and pays for part time workers. Based on these projections, the company may or may not make profits depending on the market they are present in as well as the financial backing they have available to continue with these expenses in the beginning. b. Give a two-sentence overview of how this new start up would fit into a larger economic environment.

Identify at least two external environments the new owners might need to consider for their business to be successful. Use what you learned in your readings and theme content to explain why you chose these environments to focus upon. This new start up would be looking to fit into an already depressed economic environment. At this point in time economic recession and decreasing disposable incomes are affecting smaller businesses negatively. The owners will have to focus on the economic environment because economic recession and a slow resurgence of the economy have meant that disposable incomes are low.

People would be less than willing to spend more on items such as coffee and non-essential food items because their finances would be already restrained. Another external environment that the owners would need to look into is the political environment. With elections just around the corner, the owners would need to figure out if the post election scenario would aid small businesses or dissuade them. c. Thinking about where you live--what competition would there be for a new coffee shop? How would that impact the supply of coffee in your local area?

How would it impact the demand for coffee? A new coffee shop would have to face stiff competition from previous market establishments especially the larger names such as Star Bucks. Restrained disposable income also means that people do not have enough to experiment with new things such as trying out new coffee shops. In my local area, the supply of coffee is generally derived from larger brand names or already established coffee shops because of their taste and aroma. If a new business must start in the coffee shop arena, then it would have to provide the customers with something totally new to grab and hold their attention.

Bibliography SBA. (2012). Company Description. Retrieved May 15, 2012, from SBA: http://www.sba.gov/content/company-description SBA. (2012). Market Analysis. Retrieved May 15, 2012, from SBA: http://www.sba.gov/content/market-analysis