Discussion
Question: E-commerce is creating a new economy that connects producers, sellers, and customers via technology in ways that have never been possible before. In this fast-paced world of e-commerce, size no longer matters as much as speed and flexibility. The Internet is creating a new industrial order, and companies that fail to adapt will soon become extinct.
1) Suggest your views that an entrepreneur should consider while designing an E-commerce website for their business.
2) Describe the challenges an entrepreneur faces while launching its business on an e-commerce platform
Remember to cite your sources!
To earn full credit, post an initial response of a minimum of 500 words that includes at least one APA citation and the associated reference
ASSIGNMENT
Breakeven analysis is a useful planning tool for a potential small business owner, especially when approaching lenders and investors for funds. It provides an opportunity for an integrated analysis of sales volume, expenses, income, and other relevant factors. Breakeven analysis is a simple, preliminary screening device for an entrepreneur faced with a business start-up decision. It is easy to understand and use. With just a few calculations, an entrepreneur can determine the effects of various financial strategies on the business operation. It is a helpful tool for evaluating the impact of changes in investments and expenditures.
Calculating the breakeven point for a startup business is important because it tells an entrepreneur the minimum volume of sales required to stay in business in the long run.
Anita Dawson is doing some financial planning for her small gift store. According to her budget for the upcoming year, Anita is expecting sales of $495,000. She estimates that the cost of goods sold will be $337,000, and other variable expenses will total $42,750. Using the previous year as a guide, Anita anticipates fixed expenses of $78,100.
Anita recalls a meeting she had recently with her accountant, who mentioned that her store already had passed its breakeven point eight and a half months into the year. She was pleased but really didn’t know how the accountant had come up with that calculation. Now Anita is considering expanding her store into a vacant building next door to her existing location and taking on three new product lines. The company’s cost structure would change, adding another $66,000 to fixed costs and $22,400 to variable expenses. Anita believes the expansion could generate additional sales of $102,000 in the first year.
She wonders what she should do.
- Calculate Anita’s breakeven point without the expansion plans. Draw a break-even chart.
- Compute the breakeven point, assuming that Anita decides to expand her business.
- Do you recommend that Anita expand her business? Explain.
