Date of Award

11-1968

Degree Type

Master's Essay - Restricted

Degree Name

Master of Business Administration (MBA)

Department

Business Administration

First Advisor

Howard C. Launstein

Abstract

It appeared that some type of restaurant or food facility was needed in a small Northern Michigan community. The problem was whether potential sales and the investment required would result in a satisfactory return. In addition, a loan would be needed to supplement personal funds. The amount of a loan and prospective lenders required evaluation.

An investigation of feasibility of the project was made. Estimates of potential sales were made by direct ob­servation of similar establishments with allowance made for area population. Operators of non-competitive businesses were interviewed to gain information with respect to selling costs and suppliers. The operation was also discussed with loan officers of a bank. Estimates for remodeling a vacant building and for equipment were obtained.

The information thus obtained was organized into cash flow and pro-forma financial statements. Analysis of these statements revealed that investment required and projected sales were such that the project was feasible. Based upon these figures, a parcel of property was purchased and operation begun on June 25, 1967.

Operating statements for the year 1967 indicated that profit did not meet desired levels. A late opening and failure to thoroughly evaluate suppliers contributed to the low profit figure. Forecasts for the year 1968 indicated that desired sales and profit levels will be attained.

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