Pob Sba

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Principles of Business School Based Assessment
(S.B.A)
Establishing a Business:
Finance
Name of Candidate: Romario Reid
Registration Number: 100048193
Centre Number: 100048
School: Holmwood Technical High School
Name of Teacher: Mrs. Thomas
Year: 2012
Table of Contents
Title Page Number
* Description of businesses 1
* Purpose for which Finance is needed 2
* Organizational Chart3
* The cost of producing goods4
* Capital Goods5
* Sources of Finance 6
* Collateral7
* Capital Instruments8
* Implication of Capital Mix selected9
* Projected Performance10
* Use of technology to enhance the efficiency of the business11 * Government Regulation12
* Ethical Issues13
* Executive Summary 14
* Bibliography 15

Description of the business

B’s car mart was founded in 2011 as a partnership. B’s car mart is being created to satisfy the need for a large selection of quality – used cars in the Mandeville region. The business will be financed by investments, loans and personal savings. B’s car mart is located off the new green roundabout across the “Fontana Pharmacy” billboard. At B’s car mart we understand that vehicle purchasing is a necessity, but sometimes an unpleasant experience. Our goal is: * To provide customers with an enjoyable, honest service that satisfies customers transportation needs with a quality product at a competitive price.

Purposes for which finance is needed

Finance is required to purchase the property that is located in a high- traffic area. This is where the business will commence operation. Finance is also required to purchase the necessary stock/inventory of cars to be sold. Finance is also required to purchase office equipments, fixtures and fittings to make customers and employees comfortable and able to carry business transactions. Finance is also needed to obtain the machines to service and repair the vehicles.

Organizational Chart (Flat/Horizontal)
Board of Directors
Board of Directors

Managers
Managers

Research Division Personnel
Research Division Personnel
Records Clerk
Records Clerk

Maintenance
Maintenance
Sales Manager
Sales Manager

Reporting Relation
Board of Directors – these are the partners with overall authority of the company, the manager reports to the Board of Directors. The Manager – is responsible for the day to day responsibility for the conduct and success of the business. The Sales Manager, Records clerk, Research Division personnel and Maintenance all report to the manager.

The cost of purchasing goods
Prime cost Expenses
Cash Required: $ 565, 000
Inventory: $ 5 Mil
Fixed Assets (Property, Vehicles Etc.): $ 3 Million
Total = $ 7.8 Million
Overhead Expenses
Stationery (Office Supplies, etc.) = $ 5000
Advertising = $13, 000
Consultants (Accountants)= $ 20, 000
Web Page= $ 10, 000
Maintenance= $ 40, 000
Taxes= $ 7000
Utilities = $ 30, 000
Total: $ 125, 000
Cash Required: $142, 000

The business will incur in these expenses as these expenses are fundamental in keeping the company operational.

Capital Goods

Two office buildings are needed; equipments are needed for maintenance of the vehicles, and a building for the service of the vehicles is also required. These are required to help the company make functional goods to sell to consumers.

Sources of Finance

Loans will be acquired from several sources including investments from partners. A loan will be acquired from a financial institution because it offers a long – term period and low – rate payment term. These finances are required to purchase the necessary goods and pay the bills to keep the company operational.

Collateral

Collateral is defined as assets that are offered to secure a loan. Collateral is important for upcoming businesses as...
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