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Scenario – Business Planning Michelle Smith had recently graduated from a business program at her local university. After graduation, she took the summer off to enjoy some down time, and then started looking at the job market. After several months, had not figured out what she wanted to do. The problem was most job opportunities did not appeal to her. Some of Michelle’s peers who graduated with her had started working for big corporations, and others had been able to secure jobs with the government. However, Michelle did not want to work a 9-5 job, but she did want to earn a lot of money. She had a few ideas, and while contemplating her options, Michelle decided she was going to open her own handmade jewellery boutique. She loved jewellery and had been making her own for friends and family for years. She already had some supplies and tools, could get a small retail space in the mall and create an online website to sell her products. She had it all worked out in her mind, and although she took several business courses in university, did not get around to writing out her business plan.
Michelle did some research and found out she might qualify for a government new business loan. She also knew she needed to do some
160,000 households $627 annual average spending for Jewellery and Watches (160,000 x $627) = $100,320,000
Michelle continued her research and found out there were 158 retailers selling jewellery products in the area, and in addition to her own store, this equalled 159 retailers. However, she specialized in handmade jewellery, and some of the others had much higher end products. If they equally shared the profits, this meant there was an average of $630,943 each. However, some of the retailers were very well established and well known in the area. Michelle wanted to get a better estimate of the potential sales of her business but wasn’t sure what to do next. |
Now that you have familiarized yourself with Michelle’s situation, answer the following questions:
- Is Michelle’s estimate of the market potential realistic? Why or Why not?
- What other methods could Michelle use to get an estimate of her future sales?
- What other research should Michelle perform before making her decision?
- What steps should Michelle take to decide if she should continue to open her store?
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