Business pitch company guide everest technology

Business, Business Theory, Business Operations, Revenue

Research from Organization Proposal:

Business Proposal

Company Guide

Everest Technology Computer can be described as new firm that intends to manufacture computer and its accessories. Considering that the company will operate in competitive market environment, Everest Technology must understand the costs structure to boost revenue and maximize income.

The objective of this paper is always to provide a business plan that will assist the Everest Technology to increase revenue and increase profits. The next section examines the approach that Everest Technology can employ to increase revenue.

Strategies to Increase Income

Everest Technology will use a number of techniques to increase revenue: The strategies will be as follows:

Expense cutting assess

Increase the unit price

Embrace sales

One of the best strategies that Everest Technology could employ to increase earnings is to decline costs since cost lowering is easier to implement than price go up. The formula below reveals the four factors that affect earnings:

Equation Earnings = “Revenue – (Variable costs & Fixed (capacity) costs). inches

Typically, costs predictable are easier to control. Hence, an appropriate approach to increase revenue is to implement the cost reducing measure, that can assist the organization to increase profits.. Thus, the organization could reduce costs in the areas such as advertising and circulation, purchasing, operations, production, research and development. Cost reduction in these areas will create a corresponding increase in revenue.

Moreover, the company may save the fixed costs by slicing the costs of anything that does not generate income. For example , the corporation could decrease the costs in rent, travel, interests in payable and communication. Employing cost decrease analysis, the company will generate 5% embrace profit margin because 5% reduction in the fixed costs will bring about the 5% increase in income margin everything else being the same. This is revealed in Stand 1 .

Desk 1: Embrace Revenue through Fixed Cost Reduction

Initial

Option you

Sales

Expense

70

66

Fixed

31

25

Product Variable Price

0. four

0. some

Variable

40

40

Income taxes and Insurance

10

12

Profits

twenty

25

Profit Margin

twenty percent

25%

Another method the business could use to increase earnings is by minimizing the changing costs product through outsourced workers, cheaper freelancing, and away shoring and improve performance. Typically, five per cent decline in variable costs would bring about 2% improved in the earnings margin everything being similar. This is exposed in Stand 2 .

Desk 2: Embrace Revenue through Variable Cost Reduction

Preliminary

Option 2

Sales

Cost

70

sixty-eight

Fixed

31

30

Device Variable Cost

0. four

0. 35

Variable

forty five

38

Taxation and Insurance

10

twelve

Profits

20

22

Earnings Margin

twenty percent

22%

Another strategy to increase revenue is to increase the unit price while maintaining the volume of production. With this strategy, five per cent increase in sales will result in the 3% increase in the net income margin as being revealed in Table 3. However , this plan is not really advisable since customers might switch to rivals with the increase in price. ( Landsburg, 2002).

Table three or more: Increase Earnings by increasing Price Strategy

Initial

Alternative 3

Revenue

Quantity

15

10

Value

10

10. 5

Expense

70

68

Fixed

31

30

Unit Variable Cost

0. 5

0. 5

Variable

forty five

40

Fees and Insurance

10

12. 5

Earnings

20

24. 5

Revenue Margin

20%

23%

On the other hand, the company can increase earnings by increasing the sales while the set costs stay constant as being revealed in Table four. The company will certainly realize 1% increase in revenue margin by simply increasing sales.

Table 5: Increase Earnings By increasing Sales

Preliminary

Option some

Sales

Variety

10

12. 5

Price

10

15

Cost

seventy

72

Fixed

30

30

Unit Varying Cost

0. 4

0. 4

Adjustable

40

40

Taxes and Insurance

15

10. 5

Profits

20

22. five

Profit Margin

20%

21%

1 . a couple of: Determination of Profit-maximizing Volume

The basic assumption of a organization is to take full advantage of profits. Therefore, Everest Technology will recognize profit once revenue is definitely greater than costs as being exposed below:

Tweet