Business Simulation - Case of SimVenture Software - Assignment Example

Business Simulation Introduction SimVenture is software that has over time allowed people to operate their own companies. Moreover, people are able to learn and discover new things in terms of entrepreneurship and business in an engaging and suitable way. This software is used in different places including colleges, schools and the voluntary sector as well. This is because it is a multi award winning software. In addition, the business simulation is a helpful resource in teaching and learning as it contains a wide range of applications in terms of settings in an academic manner. In effect, young people can learn about the fundamentals of business and the older students can understand how to run and maintain a growing business as their level of knowledge and understanding is expanded. In the work environment, Sim venture can be used in training sessions as a way of developing skills and encouraging teamwork. The human resource department can also use this as a tool for recruitment when hiring new employees. Prepare a report to a bank manager in support of a loan application to convince him that the business is viable and credit-worthy There a few details and documents that the team has to come up with in order to present their case before the bank manager. Some of these documents include the following: Building a credit history- This is one of the documents that can actually show the bank how responsible the group has been in the past. In addition, the students can take advantage of the program of free credit report which is offered by the government to consistently monitor how the level of credit moves forward. With time, the team of students should come up with business credit which is rather different from personal credit. It is very imperative for the team to keep both records so that the value of the business is established. The other documents that need to be presented are the financial statements for the business. The bank manager will definitely want to review how much the business is worth and how much money the same business is moving. Moreover, it is also crucial to prepare pro forma statements that are detailed to just prove the level of seriousness. This is because the document can detect projections on how much the business is worth as it moves forward. Finally, a business plan that is updated should also be presented. The bank manager will be willing to give a loan to a business that has planned and spelt out all the necessary information. In the plan, names of business partners, track records and strategies for expansion should be included. In essence, with a business plan in hand, it becomes easy to analyze the various aspects and financial details concerning the business and therefore presents an image of order to the bank manager. Reasons why the loan should be approved Purchase Equipment- This sim venture business has several choices with regard to acquiring new equipment. In this context, there are enough reasons to take a loan to purchase equipment. In consideration of this kind of business, it would be necessary for the students to ask for a loan so that they can purchase more electronic devices to help in the expansion of business. The more computers people have, the easier it is to access the software and this means that more students will grow in terms of business knowledge. Another option could include taking a tax write off of some certain amount of money in the first year of earning and ensure that the economic life for the equipment the rest of the time depreciates. A cost benefit analysis should be carried out in order for the decision to be made on whether to buy or lease the equipment. When a bank gives a loan for the purchase of equipment, normally it is an intermediate term loan which is roughly between ten to fifteen years. With all this information presented, the bank manager should feel persuaded to grant this group a loan. To Purchase Inventory- A bank loan is sought to purchase inventory for a small business. Some retail businesses are small and seasonal in nature. With regard to this, if a business makes most of its sales during a particular season, the inventory should be purchased sometime prior to the high season. In the case of business simulation in sim venture, this is the kind of business that is seasonal depending on who wants to do it. Students in colleges and universities may use the software a lot during the holidays. The corporate world and business community may need it all the time. As a result, the team should ask for the loan before the holiday season to allow more people to access when they are not in school. Since bank loans to purchase inventory are short term, the students can commit to start paying it up immediately after the high peak season. To Increase Working Capital- Working capital can be defined as the money used to run the daily operations of the business. This is mainly important for a growing business that may need a loan to manage the day to day errands until what they earn in assets is enough to cover the needs of their working capital. This is the reason why this business should be given a loan so that it can grow and make more money which eventually will be helpful in paying up. However, since the working capital loans may have higher interest rates due to their level of risk, the group How successful has the company been so far? So far the company has been quite successful despite the few challenges that arise with a growing business. The willingness of the students to venture into the business simulation has contributed to the growth. There has been a lot of publicity about this business in terms of doing advertisements and giving out posters in school to raise the level of awareness among students. This has increased the level of curiosity and students have therefore been interested. The level of success that students want to attain in business is quite high. Globally, students are trying to venture into business before they finish school. This is because students are creative and have lots of ideas on things they can do but do not really have the exposure and the right skills to grow whether ideas. The sim venture software enhances their capacity in terms of business. As a result the business has done well and registered so many students. However, despite this, there a few challenges encountered, the major one being lack of enough finances and resources. This has reduced the level of accessibility to information through the electronic devices. Further more, there is other software trying to copy the original idea and therefore raising competition although in the wrong way since they lack enough information that the original software has. Reasonable estimates of its performance in the next six months with the view of obtaining the loan from the ban manager to help finance expansion Basically, if the loan is approved, there is a prediction of tremendous growth in the next six months. More equipment will be purchased, there will be enough money to cater for daily expenses and therefore this will increase the profit margin. In terms of numbers, in the next six month, the business will grow by at least 10% which is quite good and hardly over ambitious. Activity 3 (Reflective Report) Discuss experiences of working with the team. What difficulties were encountered, how students made decisions, Were there any negotiations or within a given team. A team consists of different people coming from different places but with the same goal and interest to be achieved at a particular time. When the team came together, there was tension in the beginning since everyone seemed to be aggressive in their presentation of ideas. However, with time, people came to understand that it is out of the desire for the business to expand that everyone came out strongly. In that aspect, it is important t to note that every individual in the team had their strengths and weaknesses. Instead of focusing on the weaknesses, the team members were all allocated duties depending on what they were strong at. This ensured that all the work is done within a given time frame and everyone feels important in how they raise their ideas. However, some students were much better in their delivery and speed and this caused a delay which eventually led to frustration and arguments. Some members felt that they were more committed than others. In effect, some decisions were left pending until everyone else catches up since some tasks were harder than others. Negotiations had to be made because some decisions were to be made urgently. In spite of all these, the team decided to help in whatever way since they understood that if they do not play their part, the entire project may fail. There was a lot to be learnt in terms of working with people but also respecting each other no matter where one comes from. Comment on progress during the SimVenture exercise This entire exercise has been a learning experience for most students. New information has been discovered concerning business and the level of knowledge has increased. It is worth every sacrifice to ensure that the sim venture expands and brings in more returns. This idea should be introduced to other parts of the world and give channels of feedback to get the opinions of other people. It can be reported that there has been tremendous progress in the exercise and with time, business ideas will be created and the levels of unemployment will reduce. Explain the commitment needed – in terms of personal time and sacrifice – in order to make a success of a real small business. Commitment is very important if an individual has the heart to grow anything. The sim venture exercise was conducted with such passion since one could tell that it has potential and will become better with time. It is good to note that while starting a business, there are so many challenges in trying to put everything together. Getting a premise where the business could be set up required a lot of sacrifice in terms of time. Some of the team members had to wake up earlier than usual to make it to their appointments with several people who would explain the exercise more. . Others committed to preparing the room that will be used by the rest of the team. A lot of research is done for any business so that one can have all the facts and know how to write the documents in an appropriate way. This was nothing like the students had done before but since they all believed in it, the hard work paid off. Bibliography Sim, E. 1998. “Invest in seed and early stage software, internet and digital media companies”, Dawntreader Ventures, 6, 1-4. Read More