Part B

Chris realized that he needed help in developing a business plan and he understood that a strong business plan was important in convincing investors and lenders that his business was a promising one. For the next five months Chris worked diligently, with Gary Ryan of the Y-Enterprise Center, on completing the 72-page marketing and business plan for Griffiths Guitar Works.

Chris carried out extensive market research by conducting a telephone survey and indepth personal interviews with many local musicians and music store owners. The initial St. John's market analysis indicated that very promising opportunities existed in providing a full range of stringed instrument repair services and suggested that a price of $30 per hour labour charge for repairs would be acceptable to customers. Market information also revealed that there was significant demand for custom built guitars in St. John's. In order to provide customers with full choices in designing their own guitar, Chris realized that heavy investments of time, resources and his labour were required. Chris felt confident that the specialized nature of his business would enable him to operate Guitar Works with no additional employees.

Chris set a selling price of $1000.00 for an acoustic guitar and $1,200.00 for an electric guitar. These prices were in the same range as other quality guitar manufacturers such as Fender. Each guitar was made entirely by hand with attention to quality materials and workmanship. Taking a total of six weeks to complete, each guitar required an average of 35 to 40 person hours.

By producing high quality guitars, Chris realized that his previous employer, Mr Chord, would view Guitar Works as a direct competitor. In reality, customers wishing customized guitars usually purchased their guitars on the mainland and not from local music stores.

The Problem

After extensive investigation of the costs of starting up his small business, Chris determined that he required initial capital of $20,000. With no personal capital, and very little collateral (four guitars and some manufacturing tools) on which to base a business or personal loan, Chris struggled to find ways to obtain the needed funding. He knew that a maximum of $30,000 was available to entrepreneurs (under the age of 28) through the Youth Ventures Plan of the Y-Enterprise Centre and that the Atlantic Canada's Opportunities Agencies(ACOA) would sometimes provide grants of up to 50% of start up business capital costs to individuals who were pursuing manufacturing ventures in the Atlantic Provinces. Consequently, Chris was hoping that he would be able to borrow $15,000 from the Youth Ventures Plan and receive a $5,000 grant from ACOA.

Chris had distributed his business plan and funding proposal to the 13 members of the Board of Directors of the Y-Enterprise Centre who would evaluate and decide on Chris's request for funding from the Youth Ventures Plan. He was preparing for the lunch time meeting that would take place in three week's time. He knew that these individuals were experienced businesspeople who would be thoroughly prepared for this meeting.

Questions

Chris realizes that he must convince this group of businesspeople, bankers, entrepreneurs, and government officials to lend him the money that he needs to bring his idea to market. List the many talents and specialized skills which Chris brings to this venture