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Having been made redundant, Lia O'Brien has decided to set up her own enterprise manufacturing individually designed disposable tableware and paper cups for small coffee shops and restaurants - Leaving Cert Business - Question C - 2015
Question C
Having been made redundant, Lia O'Brien has decided to set up her own enterprise manufacturing individually designed disposable tableware and paper cups for small co... show full transcript
Worked Solution & Example Answer:Having been made redundant, Lia O'Brien has decided to set up her own enterprise manufacturing individually designed disposable tableware and paper cups for small coffee shops and restaurants - Leaving Cert Business - Question C - 2015
Step 1
Raising finance/capital:
Answer
Lia will need to identify how much debt capital and equity capital she requires to initiate her business. This involves understanding the sources of finance required for growth. Debt capital entails risks associated with being highly geared. It is crucial for Lia to plan for fixed interest repayments on debt capital that must be accounted for, regardless of profitability.
Step 2
Production method:
Answer
Lia must consider the appropriate method of production based on the type of products to be manufactured. This will include understanding the demand for her products and the necessary operations such as automation, staffing, and storage. Determining the right production method will significantly affect the range of products she intends to sell.
Step 3
Ownership options:
Answer
Deciding on the ownership structure is critical, as different structures have varying implications on control, liability, and tax. Lia needs to assess whether she wants to operate as a sole trader, partnership, limited liability company, or corporation, which will influence her decision-making and financial strategies.
Step 4
Marketing her business:
Answer
Finding customers is essential for her enterprise's success. Lia needs effective market research to determine the target audience and suitable marketing strategy. This includes branding decisions, advertising routes, and establishing her unique selling proposition to ensure she reaches her market effectively.
Step 5
Availability of services:
Answer
Lia must also consider the availability of essential services such as infrastructure, utilities, and labor. She will need to ensure that she can source the necessary materials and labor for production and that her physical location supports operational efficiency.