Will Bury Business Proposal
Business Proposal for Will Bury
Dea S. Woodward
ECO/561
May 14, 2012
Kathleen Crump
Business Proposal for Will Bury
New strategies and productions ideas and techniques are needed for a business to remain competitive and profitable. Many companies create ideas and ways of providing efficient products and services that will help meet the economic demands of customers in the market. Will Bury, an enterprising inventor, introduced a creative idea of changing printed text material into digital format for reading and audio format for listening.
The proposal will identify methods of increasing revenue, determining profit maximizing quantity and the concepts of marginal costs. It will further discuss pricing and non-pricing strategies, …show more content…
Price elasticity The product elasticity of Bury’s product is considered lower since there are no exact replicas or substitutes in the market, but there are somewhat similar products being sold. The demand relates to the amount of reading that the consumer does. This is why product pricing is imperative in making pricing decisions. Pricing the products at a lower cost allows consumers to purchase more with room to make price changes as needed. Staying competitive in the market provides Bury with the advantage of knowing when there a substitute product has entered the market.
Fixed and Variable Cost The two main components of a company’s overhead expenses are fixed and variable costs (Fixed & Variable Expenses, 2012). Fixed costs do not fluctuate when production activity changes. Will Bury currently does not have any fixed cost, such as rent, insurance, dues and subscriptions, equipment leases, payments on loans, depreciation, management salaries, or …show more content…
A business owner must look for opportunities to reduce costs when possible. Will Bury has eliminated much of the overhead expenses by not using an office. A decision is needed to hire someone at $10 per hour or pay an overseas worker $2 per hour for the same service. There are various factors to consider before making this decision. Some factors include skills required, trustworthiness, and having the expertise of Will available when immediate needs arise.
Marginal Cost and Marginal Revenue Bury must determine a price to sell his products. According to Business Dictionary (2012), the marginal cost is defined as the increase or decrease in the total cost of a production for making one additional. Using the formula marginal cost equals marginal revenue (MC=MR), a cost can be determined. Marginal revenue equals the amount of products sold times the price.
Bury has researched online that a 500-page book on CD cost around $20. This would mean that Bury’s price should not exceed $20 and the initial price of $15 is a good price to begin selling these products. This will allow further adjusts to be made as the demand for the products increase or decrease. Applying a reasonable cost to purchase this product will help the business achieve profitable
Dea S. Woodward
ECO/561
May 14, 2012
Kathleen Crump
Business Proposal for Will Bury
New strategies and productions ideas and techniques are needed for a business to remain competitive and profitable. Many companies create ideas and ways of providing efficient products and services that will help meet the economic demands of customers in the market. Will Bury, an enterprising inventor, introduced a creative idea of changing printed text material into digital format for reading and audio format for listening.
The proposal will identify methods of increasing revenue, determining profit maximizing quantity and the concepts of marginal costs. It will further discuss pricing and non-pricing strategies, …show more content…
Price elasticity The product elasticity of Bury’s product is considered lower since there are no exact replicas or substitutes in the market, but there are somewhat similar products being sold. The demand relates to the amount of reading that the consumer does. This is why product pricing is imperative in making pricing decisions. Pricing the products at a lower cost allows consumers to purchase more with room to make price changes as needed. Staying competitive in the market provides Bury with the advantage of knowing when there a substitute product has entered the market.
Fixed and Variable Cost The two main components of a company’s overhead expenses are fixed and variable costs (Fixed & Variable Expenses, 2012). Fixed costs do not fluctuate when production activity changes. Will Bury currently does not have any fixed cost, such as rent, insurance, dues and subscriptions, equipment leases, payments on loans, depreciation, management salaries, or …show more content…
A business owner must look for opportunities to reduce costs when possible. Will Bury has eliminated much of the overhead expenses by not using an office. A decision is needed to hire someone at $10 per hour or pay an overseas worker $2 per hour for the same service. There are various factors to consider before making this decision. Some factors include skills required, trustworthiness, and having the expertise of Will available when immediate needs arise.
Marginal Cost and Marginal Revenue Bury must determine a price to sell his products. According to Business Dictionary (2012), the marginal cost is defined as the increase or decrease in the total cost of a production for making one additional. Using the formula marginal cost equals marginal revenue (MC=MR), a cost can be determined. Marginal revenue equals the amount of products sold times the price.
Bury has researched online that a 500-page book on CD cost around $20. This would mean that Bury’s price should not exceed $20 and the initial price of $15 is a good price to begin selling these products. This will allow further adjusts to be made as the demand for the products increase or decrease. Applying a reasonable cost to purchase this product will help the business achieve profitable