Question 2: (50 marks)

The business that you started in question 1 above has taken off, and the demand for some of your products is growing beyond your ability to source them. You are therefore investigating the possibility of starting to manufacture some of the products under license from the original manufacturers. You do not have more capital to put into the business so you will be approaching potential investors for funding of the expansion.

a) Prepare a business proposal which you will be presenting to the potential investors to attract funding from them.

The proposal must include a budget. A monthly budget for 12 months plus a further 2 years. (40)

b) Include a discussion on how you would assess the break-even point for the business. (10) Clearly indicate the assumptions that you are using and how and why you arrived at these particular assumptions.

Local purchases at cost for one month:

Products	No of Units	Purchase Price per Unit
Safety Boots	25	R250
Hard Hats	20	R20
Cotton Overalls	30	R100
Disposable Earplugs	50	R10

Foreign purchases at cost for one month:

Products	No of Units	Purchase Price per Unit
Safety Boots	25	US $20
Safe Mask N95	100	US $5
Flame resistant overall	45	US $15

Overhead costs to be considered:

Expenses	Monthly Cost	Once off Cost
Website Design		R20 000
Website Maintenance	R500
Data Cost	R1 500
Salaries	R25 000
storage cost of products	R8 000
Local Transportation	R5 000
International Freight Cost	R10 000