Computer Retail Business - Essay Example

Mission ment Our mission is to serve the technological needs of our s by providing superior service and great prices. Company Overview The company that I founded is a retail computer outlet. The computer industry generated sales of over $300 billion in 2010 (Answerbag, 2012). The firm is organized as a corporation. The corporate structure was chosen due to its many advantages including ability to raise capital, lack of liability for shareholders, and ability to land governmental incentives. The products and services the company offers includes desktop computers, laptops, computer repair services, computer parts and software, smartphones, music players and other electrical gadgets.

The company plans on starting out as a single store to then expand into multiple establishments. Start-up costs In order to determine the ability of the company to generate a profit the managers of the organization have to analyze the operations of the firm based on the costs and expenses that the company will incur during its initial start up phase and the variable and fixed expenses that the company will incur in the future (Weygand, Kieso, Kimmel, 2002). When the company decided to choose the corporate business structure the first costs the company incurred were the legal and governmental fees to incorporate.

The firm spent $1,500 to incorporate the computer business. An estimate of the costs the company will incur is necessary to start a business. The company will purchase $30,000 in computers to be sold in the retail market. The markup on these computers is 40%. In order to complement the store the company sells other devices such as tablets, MP4 devices, and smartphones. The markup on these electrical devices is 50%. The company will invest an additional $10,000 in other electronic merchandise.

In terms of computer parts the firm will invest $5,000. The original restoration of the lease rented as the retail outlet cost is $7,500. A start-up capital cost table of the company is illustrated below:Legal expenses $1500Computers $30000Computer parts $5000Electrical gadgets $10000Leasehold improvements $7500Total start up costs $54,000 The company needs $54,000 start up capital, but there are other expenses that the company must consider prior to starting the business. The $54,000 is the money needed to set up the business, but once the business starts the owners and managers have to consider a series of other operating expenses that will affect the financial outcome of the company.

The administrative expenses of the firm are $2,000 a month which accounts for the salary of the manager. The company will run on three employees at all times in the floor. The salary of these employees is $7.25 an hour. The store is open twelve hours a day, thus the daily direct labor expense is $783 a day. The rent is $2,700 a month and the utilities are $450 a month. The insurance costs of the company account for $1,200 a year. The firm has maintenance contract with a cleaning company that costs $500 a month.

ReferencesAnswerbag.com (2012). Great Answer. Retrieved August 12, 2012 from http://www.answerbag.com/q_view/2082493 Weygand, J., Kieso, D., Kimmel, P. (2002). Accounting Principles (6th ed.). New York: John Wiley & Sons.