When conducting an economic analysis we are essentially conducting an evaluation or once-over on an organizations financials. The process generally consists of measuring, evaluating, and considering the internal and external environments, as well as recognizing a company’s strengths and weaknesses in order to impart the most effective advice surrounding its financial stability and sustainability. It is imperative to conduct financial investigations as a part of the process to gauge whether an organization is successful in apportioning their assets. The purpose of this exploration is to create an analysis section of a business proposal in which I will incorporate materials about the market structure, the elasticity of the service, the price point, and its influences on marginal costs and revenue, and non-pricing strategies. In addition, it is my intention to identify how changes in business operations could alter the mix of fixed and variable costs.
Garage sales are something that people love to hate and hate to love. This is a great opportunity to make money for your unwanted junk, de-clutter your home, and make room for new items. After all, one person’s trash is truly another’s treasure. At Garage Sale Experts, we will go into homes and businesses to provide an estimate for a garage, parking lot, or yard sale; sorting through all of the unwanted belongings, determine if there are enough goods to hold a sale, establish a solid price point for each item, and ultimately hold a sale for one to two days. Of course, there are going to be occasions where there is not enough in one household or office to host a sale, but when combining multiple households or businesses can create a massive sale that will attract a large crowd and ensure better sales for all clients. Elasticity
During the initial consultation, a fee $25.00 fee will be assessed, once the sale is held that cost will be deducted from the amount the client owes to Garage Sale Experts. If for some reason the client decides not to go with our company, they will be refunded a portion of the payment. There will be an additional cost of $15.00/hour for each employee that is needed to work during sorting, pricing, and set up days. The day of the garage sale two individuals will be present to negotiate with customers and close sales, all profits will be tallied up at the end of each day and held over until the end of the sale. On the final day the customer will be assessed a fee based on a percentage of the sales. Since the competition is non-existent at this point, I would have to say the service is inelastic. However, as word gets around pricing will be crucial to ensure competitive advantage. Additionally, if the fees, commissions, and costs are too high customers might decide to forgo the intermediary and hold a sale themselves or just donate the items for a tax write off.
SWOT: Internal and External Environments
In order to conduct the most effective analysis of a new company that is entering into a market where the demand is unsure I find it is beneficial to complete a simple SWOT Analysis. While there are garage sale coordinators and television personalities who go into people’s homes to help them reduce clutter and renovate the house the actual need for someone to go into businesses and homes on a daily, weekly, or monthly basis and sell new or gently used items is still uncertain. A few of the strengths I anticipate for Garage Sale Experts is that we are new and unique in our district, there are no companies that would present any competition in Northern Nevada, people are always looking for a bargain, and the amount of garage sales advertised on a weekly basis is significant. These are all positive aspects that allow the company to see a demand for the service, help to forecast profitability, and predict sustainability. Where there are strengths, there are also weaknesses, and moving into larger markets will require additional