For Type of Business
Retail Business
· Company image
· Pricing:
o Explain markup policies.
o Prices should be profitable, competitive, and in accordance with company image.
· Inventory:
o Selection and price should be consistent with company image.
o Inventory level: Find industry average numbers for annual inventory turnover rate (available in RMA book). Multiply your initial inventory investment by the average turnover rate. The result should be at least equal to your projected first year’s cost of goods sold. If it is not, you may not have enough budgeted for startup inventory.
· Customer service policies: These should be competitive and in accord with company image.
· Location: Does it give the exposure that you need? Is it convenient for customers? Is it consistent with company image?
· Promotion: Methods used, cost. Does it project a consistent company image?
· Cash: Do you extend cash to customers? If yes, do you really need to, and do you factor the cost into prices?
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