Financial Analysis and Pricing Structure - Research Paper Example

Download file to see previous pages... Off 2 Gran Grans is a service organization with a significant emphasis on using corporate social responsibility as a positioning and competitive tool. The target market for the company is the senior citizen aged 60 to 100, with a secondary market consisting of immobilized shut-ins of varying age categories to assist in revenue production. Off 2 Gran Grans provides assistance services, such as house cleaning and errand running for medications and groceries, with a supplementary service for visitation, consisting of gate keeping services and interpersonal relationship development. Being alone is rather frightening to most senior citizens supporting psychologists stating that warm interpersonal relationships are the most fundamental of human needs (Brammertz and Akkizidis 9). Off 2 Gran Grans will provide psychological adjustment for its target consumers and also fill a tangible need that require fulfilling due to limited mobility, lack of access to transportation, and lack of family and social support. Financial Analysis for Off 2 Gran Grans In the financial analysis of the products and services that Off 2 Gran Grans, the business will need to re-evaluate the number of customers that are likely going to require its services and determine the revenue that it expects from the services it will offer to the customers (Brammertz and Akkizidis 9). ...
The business will also need to estimate the expected return on investment before venturing into business. This will aid the decision on how much to invest in the business and even estimate the time that the business is going to require in order o break even. The financial analysis for the above company is going to encompass three main areas, that is, the net present value, the sensitivity analysis, and the break-even analysis (Lee, Lee and Lee 25). This is important in leveraging the company in a business that has negative reviews from customers. However, this will enable the business to identify where its competitors have been failing and correct it before setting out to provide the services to the people. Break-even analysis The understanding of the break-even in a business is important because it helps in fixing the financial status of any business. As a service provider, Off 2 Gran Grans will need to have a a competitive price for its services and products to the elderly people that will be identifiable with the customers. The business will have to take a number of initiatives that are geared towards ensuring that fixed expenses like rent, electricity and others are kept to the minimum with a view of cutting down on the operation costs (Shim and Siegel 32). In determining the breakeven point, Off 2 Gran Grans will require to have 200 customers who will be charged $100 per month as upkeep costs. Since the organization’s initial investments is between $58,000 and $95,000, the company therefore should expect to break even in five years’ time. However, with investment in advertisement each year, this period may be reduced to 3 years. Sensitivity ...Download file to see next pagesRead More