AFM211 Lecture Notes - Lecture 9: Financial Analysis, Basic Writing, Income Statement
30 May 2018
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DECISION MAKIGN CASE
No, for ases, e are oig oto reoed a optio type
• “oeties sayig do othig is a optio it self – maintaining the status quo
• Start with WHAT → business model → turn activities into numbers → $$$
• Its no longer asking the question WHY? But asking WHAT IF?
Case: Huron Farms Dressage
• Who are we?
• Dianne Boyd
• Basic request
• Dianne is thinking about starting a business with a partner due to her love of horses
• What’s usiess goig to do? (production cycle)
• Buy horses, train them, and then sell them
• What answer to answer for Dianne before making decision?
• 1. Will I need a loan/line of credit for the business?
• 2. Form of legal entity. Choose between sole proprietorship, partnership, and corporation
• 3. Other information Dianne should be doing?
• 4. Will it be profitable?
• Where is the business in terms of life cycle stage?
• Concept- just a idea stage, she has’t doe aythig. This is iportat eause as e do
financial projection, the first few years of the business, a lot of time you are losing money
and you need financing
• Any other activities to do to make this business successful?
• Marketing- building up reputation
• Location to train the horses in
• Transportation
• Hire trainers
• Feed horses, boarding (put a roof over them)
• Veterinarians- Keep the horses healthy
• Tack? The saddle, things put over horse
• Is this the appropriate location to bring the customers?
• How long does it take to produce a trained horse?
• A year for the production cycle
• Customer?
• rich people and Olympic riders
• Channel?
• Word of mouth
• Market on the website
• Thinking about keeping one horse we trained and took it to shows (one of the WHAT Ifs)
• Why does the business exist? Purpose of starting this business as an old lady?
• A hobby- not trying to make a lot of money
• Willing to put $100,000 into the business, and willing to lose this 100,000 but NO MORE.
find more resources at oneclass.com
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Document Summary
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