Essay about Business: Net Present Value and Club

Submitted By layan0717
Words: 1797
Pages: 8

Club IT
Club IT is a nightclub owned and operated by Ruben Keys and Lisa Tejada. The club has retained and even increased its niche customer base making it a success, so far. The evenings are usually the busiest time for Club IT because locals enjoy going out to eat, drink, and socialize with friends. Ruben and Lisa decided with this success it is time to expand; more specifically, they want to expand on their information system for more than profitability to the club but to allow their customers additional information and reliability. A nightclub is a different type of business and there is much to learn, through monitoring I have come to learn the clubs current needs and their targeted demographics.
Club IT offers their patrons a high-energy night of food, drinks, music, and dancing in an energetic, friendly, and safe atmosphere. Club IT has a clientele ranging from those in their early 20s to the mid or late 30s. Most of the club’s clientele are considered to be of the Net Generation, and sometimes referred to as Millennial; these are people who embrace new and the most popular technologies as soon as they are released. Oftentimes technology clever individuals will wait in lines for hours to gather the newest technology products. The Net Generation customer is constantly changing so the club needs to ensure he or she do not become bored and take his or her business elsewhere. Club IT has a website, but it is not using it to the fullest potential, the club needs to promote the amenities they have to offer. Promoting the experienced and friendly staff of cooks, bartenders, servers and security will show clients they will be taken care of in and outside the club. Information technology is essential to Ruben and Lisa improving community and business involvement.
Club IT uses links allowing access to supplier information, marketing, human resources along with accounting and financial records. Each employee is given a username and password that allows the access into the clubs intranet system so he or she can view information pertinent to his or her employment; pay rate, vacation hours, and even the financial information of the club. Although this may be information that has been keeping them afloat, it is not adequate to enable them to grow into the club they want to become.
Once inside the club there is no access to Internet so considering Club IT is a club geared toward the technology generation the first priority needs to be Wi-Fi access throughout the club. In addition to Wi-Fi there is the need for a hand-held wireless system that enables servers to input orders from anywhere in the club. The return on investment (ROI) for acquiring a handheld order-taking device will increase accuracy when taking customer orders, increase ticket sales, reduces staffing requirements, lowers printing and paper costs and has the ability to lower the probability of an audit because the data is accurately entered in the master system then reviewed my management to correct errors.
According to Investorpedia (2009) the most successful way to determine the ROI benefit is to divide the cost by the investment; this result will be in a percentage format. The net present value (NPV) should increase cash flow with the purchase and use of an order taking system. There are various ways to use NPV and if used correctly it allows contemplation of capital costs, current and potential investment opportunities, and interest rates.
The easiest way to calculate the net present value correctly is with a Microsoft Excel spreadsheet. The spreadsheet method notifies the user if formulas are incorrect and permits multiple changes simultaneously. Ruben and Lisa need to review the numbers carefully because if the NPV results in a negative number this will have an impact on their cash flow so it may be beneficial to postpone the project temporarily. However, looking at the same numbers in a broader vision may bring about something different. If there is…