Verified Document

Business Plans Investment Decisions An Analysis Of Business Plan

Business Plans Investment Decisions

An Analysis of Three Business Plans in Regards to their Riskiness

This paper will examine three separate business plans and rate these plans based on the level of risk and the cost of capital that should be awarded to these plans. Of the three plans considered, a plan for an expansion of a coffee production facility in South America carries the least risk. An investment opportunity for a truck stop in Texas was estimated to carry slightly more risk but to be a relatively solid investment. Finally, an investment opportunity in a marketing company that targets high-tech firms and provides marketing services for firms who wish to enter foreign markets was recognized as the riskiest investment although it also has the highest potential rewards.

Acme Consulting

Acme Consulting involves a proposed business that specializes in a fairly focused niche (Palo Alto, N.d.). The organization will focus on the marketing of high-tech products in foreign markets. This niche is not well developed and many organizations do not have the internal resources available to actively market their products in international markets. The company intends to specialize...

Their target market is intended to be small and medium size enterprises (SMEs) as well as larger corporations. The company believes that it can earn revenues of $159,000 its first year and grow them to $289,000 by year three of operations.
Despite the opportunities that may lie in this business plan, there is significant risk to this proposal primarily due to the fact that the company is untested, based on professional service, and is intending to operate with a relatively slim net profit margin. Therefore, any deviation from the original business plan could result in financial hardship for the company. However, at the same time there is also significant potential to generate huge returns on investment. This seems to be a high risk and high reward strategy that should be pursued with a cost of capital rate of roughly fifteen percent.

Interstate Travel Center

Interstate Travel Center will represent a major travel center in Dallas, TX (Bplans, N.d.). The truck stop will target NAFTA trade as well as the local Dallas market. The management team will consist of a married couple who have business experience but…

Sources used in this document:
Works Cited

Bplans. (N.d.). Coffee Export Business Plan. Retrieved from Bplans: http://www.bplans.com/coffee_export_business_plan/executive_summary_fc.cfm#.UFCjnI1lSBo

Bplans. (N.d.). Truck Stop Business Plan. Retrieved from Bplans: http://www.bplans.com/truck_stop_business_plan/executive_summary_fc.cfm#.UFCjko1lSBo

Palo Alto. (N.d.). Acme Consulting. Retrieved from Palo Alto: http://www.paloalto.com/sampleplans/bpp7/enu/live/acmeconsulting_live.pdf
Cite this Document:
Copy Bibliography Citation

Related Documents

Business Plans Investing and Risk Analysis Investment
Words: 669 Length: 2 Document Type: Business Plan

Business Plans Investing and Risk Analysis Investment decisions involve consideration of both quantitative and qualitative factors. The focus of business classes, many times in on the quantitative portions of the plans. However, these "forecasts" do not predict the future, or the success of any business endeavor. At best, they demonstrate that the prospective business has at least given operations some thought, but they do not ensure the success of a business. Investment

Business Finance Assessing the Risk in Three
Words: 1357 Length: 3 Document Type: Business Plan

Business Finance Assessing the Risk in Three Potential Investments The way an investment is assessed will include consideration for the level of risk that is present in that investment. The higher a risk associated with a business the higher the required rewards referred to as the risk and reward equation. Where the risk premium increases this will also lead to the use of increased discount levels in discounted cash flow assessments, such

Business Law
Words: 1547 Length: 5 Document Type: Research Paper

Business Law A Legal Analysis of Pricing Strategy Effects on Distribution Channels and Networks The implications of pricing decisions have far-reaching implications for any enterprise seeking to grow their sales through alliances, indirect channel selling partnerships and the expansion of their direct sales forces with sales representative organizations. The legal implications of using price as the primary, determining factor in expanding distribution networks has significant implications for a firm's legal strategy over

Business - Case Studies --
Words: 3816 Length: 15 Document Type: Term Paper

Market Analysis The third principle, that markets that don't exist can't be analyzed, reminds managers that assessing the effects of disruptive technologies is often counter-intuitive to good management practice. Many companies require the development of a business case and a business plan for new products. This approach is generally very successful when applied to sustaining technological innovations, because the market is well-known; however, when companies apply this strategy to new, emerging

Financial Stakeholders in a Business Main Financial
Words: 2155 Length: 6 Document Type: Essay

Financial Stakeholders in a Business Main financial stakeholders, their power and influence in a business Stakeholders refer to people affected or have an interest in the objectives and operations of the business. The business has a variety of stakeholder segments, which have been broadly categorized as follows: The classification of stakeholders varies in terms of interests to the activities of the business and their power to influence key decisions. The fact is

Business Plan for an Imaginary
Words: 5030 Length: 16 Document Type: Business Plan

There are minor differences in prices, quality, and features of these products. Therefore, consumers can choose those products that best match their current needs. In the new market, Technosoft will need to strive hard for building a strong customer base by producing and promoting innovative technology solutions. v. The Bargaining Power of Suppliers: The bargaining power of suppliers is strong against new and small scale software manufacturers while very low against

Sign Up for Unlimited Study Help

Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.

Get Started Now