Custom «Business Partner» Essay Paper Sample

Alicia and Clifford are business partners who have a desire of buying a prime property, specifically land which is expected to be sold off quickly given its location and potentiality for making profits. Their desire in purchasing the land is to establish or construct a Farmers’ Market which could yield profits. As a result, they were under pressure in making a decision as to whether to purchase the piece of land which could quickly be sold off or consider some other conditions surrounding the land before they purchased it. Some of these conditions included the fact that no development could take place on the piece of land without the Municipal’s development approval and the public’s approval as well.   However, the partners’ big dilemma lay in the fact that before the purchase of the land on which the Farmers’ Market could be established on the proposed piece of land, then the approval of the public as well as the Municipal development agreement was a prerequisite. In order to start operating the Farmers Market in the year 1994 as per their wish, the partners’ hopes depended or were based on how fast the development agreement could be signed and the approval of the public.

The land’s profitability

The partners, Alicia and Clifford, despite having ascertained whether such a business venture could yield profits doubted on the duration that the development agreement approval from the Municipal and public approval could take. In order to make a wise decision whether to buy the land on sale or not, then it was vital for both partners (Alicia and Clifford) to ascertain the profitability of the land opportunity as well as the duration that the Municipal’s development agreement could take. They therefore had to consult various business people as well as their close friends to ascertain the viability of this business venture.

The Village of St. Mary’s

Apart from the land intended to be purchased by the partners for the business opportunity, the Village of St. Mary’s also proved to be a vital location for the establishment of a Farmers’ Market. This is due to the fact that the village has a population of approximately 3000 inhabitants and the area surrounding it was growing faster and thus many people were relocating towards it. This could provide a green new market for the partners because the area has not yet been invaded by many business competitors as compared to other towns and villages as well.

From the information from the case study, it can be clearly and genuinely ascertained that indeed, the Village of St. Mary’s could provide a good business opportunity for Alicia and Clifford. This is because, apart from the various tourist attraction activities that were prevalent in the area like for instance tidal bores, camp grounds and horse back riding, the area was also lucrative in economic terms in that it had an internationally recognized sculptor. Besides the traditional crafts persons, the Village of St. Mary’s was also home to honey based products which could greatly contribute towards the areas economic growth and success.

Given the location and potentiality of the St. Mary’s village, the purchase of this prime property of land by the partners could prove to be a niche for the establishment of the Farmer’s market by the two partners. The construction of the Farmers Market at the proposed land to be sold out could really reap profits for the partners if everything seemed the way they were. The location of the Farmers’ Market in relation to St. Mary’s village is a clear indicator that such a business venture could be viable and profitable once started.

Clifford’s idea

Clifford’s idea of establishing a Farmer’s Market in the “corridor” is also valuable considering the fact that it is located on a route that is commonly used by people during their day to day activities in the region. However, the area could not be very viable for the establishment of a Farmers’ market since the route on which the market could be constructed is slightly longer as compared to other routes. Apart from that, the “corridor” could not be a very viable place for the establishment of the Farmers’ Market since many local businesses were also located along the route. Due to such factors, the establishment of a Farmers’ Market in the “Corridor”, though valuable, may not prove to be profitable in the long run. The availability of local businesses on the routes located on the “Corridor” could provide stiff competition to the partners’ Farmers market and thus make the business to fail in realizing the targeted profits.

The ideal land for sale

Given the fact that the ideal land for sale that the partners wish to purchase in order to set up a Farmers’ Market needed quite a significant amount of work in order to get it ready for construction, the Farmers Market of establishing the Farmers’ Market within the desired time frame (in 1994) cannot materialize. This is because, apart from the imminent long duration that could be taken as the partners waited for the outcome of the Municipal’s and public’s development approval, the preparation of the site in order to make it ready for construction of the Farmers’ market could take a long period of time and also be costly for the partners. This therefore leaves the partners in a dilemma as to whether to go ahead and buy the proposed piece of land that has been put up for sale and wait for the Municipal’s approval which was indefinite or look for other options (Gitman, et al, 2008, p. 134).

Despite the fact that the land that has been put up for sale could provide a good opportunity for Alicia and Clifford, the partners, to make good profits, the venture could in the long run prove to be too expensive for them. This is because apart from the costs which could be incurred in clearing the land to make it viable for construction, the partners may as well be forced to incur some other costs. Apart from the $42,000 the owner asked for, the partners will also be required to pay an additional $3500 to the Municipal as sewer tax. Despite of the costs, Alicia and Clifford has a strong belief that they were in better position of making profits given the fact that the prime land put up for sale was located in such a position which could enable them  capture the metro traffic that sought the local market, Sunday drive as well as the traveling population of tourists.

The Partnerships

The inclusion of an additional two partners (Ann and Howard) into the business venture of purchasing and investing in the proposed land meant or implied shared profits. It also meant that decisions had to be made by the four partners regarding any issue that was concerned with the business venture.  This is due to the fact that the success and eventual profits that could be derived from the business venture would be ultimately shared between the four business partners, namely Clifford, Alicia, Ann and her husband Howard. Instead of the profits being shared among the two initial partners, the profits would now be shared among four partners as a result of these. The idea of establishing an equally split four Way Corporation if the idea appeared to be profitable implied that the profits shall also be equally shared among the shareholders of the business venture.

The success of the Farmers Market and its operation-Green Acres

The success of the Farmers’ Market, according to the four partners, will greatly depend on the ability and capability of the market to satisfy the different needs of the three groups of people which include the inhabitants of the place who want quality products that are produced locally, the tourists who sought for quality products that were presented in the “Nova Scotian shopping experience” context and finally, the Metro traffic who drove in the country during weekends.

According to the partners’ plans, it was asserted that the market’s tone could be more upscale as opposed to that of the markets which existed and thus would be open from May to October. This implied that during spring and early summer, the main selling items of the Farmers’ Market would be potted plants and bedding, fertilizer, bulbs, manure and other gardening products. Vegetables and fresh fruits would eventually be offered to the clients in the Framers’ Market by local farmers as the season progressed. Wholesalers would then supply non-seasonal products like for instance oranges, plums, onions, mangoes, red peppers and specific varieties of apples.

The partners on the other hand, also planned to include variety selection of crafts from local people which included among others compotes, preserves, maple syrup and honey, locally made varieties of deli sausages and meat, ice cream, prepared foods like for instance specialty sausages among others. This is because most of their competitors lacked crafts from local people, a concept the partners could greatly capitalize on to beat their competitors. Basing on their observations and from other peoples advice, the four partners were of the notion that the establishment of a bakery was crucial to the Farmers’ Market and therefore a strong drawing card. According to Alicia, the Farmers’ Market was bound to achieve greater profits as a result of tourists and townspeople who could be dropping by to have tasty treats.

How Marketing Techniques will be developed for the Niche Farmers’ Market (Green Acres)

Any business entity keen on succeeding in any business environment ought to realize the importance of marketing strategies. In order to increase profits, then the partners of Green Acres will have to use relevant marketing strategies in order to market their business entity and create the much needed awareness among potential customers. Among the marketing strategies that will be applied by the business entity will include the establishment of a tourist information area which should be located on the site. The Farmers’ market would be in better position to assist the tourists through provision of pamphlets, brochures and travel guides which will be provided by a local tourist bureau. The tourist bureau, might in future, consider moving their booth from the current place that is located on a tertiary highway towards the Green Acres location.

The Farmers’ Market would greatly capitalize on the fact that the bus and bicycles were common in the area and thus increase the Farmers’ Market’s profitability. A list of activities should also be developed for both adults and children whereby an area will be allocated or them to allow them to watch how the artisans worked.

The feasibility of the business venture and potential competitors

Given the fact that the partners had gathered enough information to ascertain that the establishment of the Farmers’ Market was indeed visible, the decision as to whether to buy the proposed piece of land for the establishment of the market entirely lay with them. It was entirely the partners’ privilege to make a decision as to whether to invest in the business venture despite the imminent risks or quit altogether.

As it is common in many business environments, the presence of competitors in the market is a reality that the partners should face. Along the proposed location of the Farmers’ Market, various competitors do exist. For instance, the Darby’s Market was known to lack the advantage of the “urban/country commuting resident” which is increasing. The partners of the Green Acres therefore felt that they could capitalize on this competitor’s weaknesses to satisfy the needs of such residents who wanted to have a feeling of the country market having specialty goods and a variety of a superstore. The Green Acres could also capitalize on the fact that the Darby’s Market does not offer any local crafts.

Farmer’s Friend was another potential competitor for Farmers’ Market but given the fact that no produce and crafts were sold in the premises, this could present a good opportunity for the Farmer’s Market to capitalize on such a weakness to make profits. The major competitor for the Farmers’ Market was Sobey’s because of their buying power and strength. However, the Green Acres partners were determined to compete with this fierce competitor in terms of price, service and location. The Green Acres could also capitalize on the fact that individuals who lived in the neighboring towns preferred the exit at St. Mary’s to drive through town after getting off from the major highway. As a result, they will first have to pass the Green Acres. The fact that the Sobey’s had no local craft and the Green Acres had lower prices will greatly contribute towards the Green Acres success.

The issue of cost

Among the risks that the Green Acres faced was the issue of the costs to be incurred. Given the fact that the partners had agreed to the construction of a larger building on the prime property as opposed to a smaller one which needed to be expanded within a few years, this implied that lots of costs had to be incurred. For instance, the total costs for construction of the whole building were approximately $60, 000. In addition $40,000 was required for the purchase of the 1.5 care lot not forgetting the $20000 dollars which were needed for clearing the land to make it viable for building and subsequent parking.      

The traffic counts

In order to develop an index and ascertain demand, travel statistics for Highway #8 and traffic counts for other highways in other Farmers’ markets that have been successful were collected from the Department of Transportation. The examination and analysis of traffic counts in various locations in relation to Green Acres and its rivals would enable the partners to design strategies of entering the market. Through the use of traffic counts and estimated revenues arising from other competitive operations, Alicia strongly believed that an index could be developed to estimate revenues.

In order to ascertain how much the Farmers’ Market stood to loose in terms of revenue on the seasonal sales, the sales per month were depicted as a percentage of the total amount of the enterprise as shown in Exhibit three below:

EXHIBIT 3: PERCENTAGE OF TOTAL SALES BY MONTH

At different times of the year, different proportions of revenues would be represented through groups of various products. Given the fact that each group of the product will represent a different margin of profit and since their first year will not be a full season, the breakdowns will be important in helping the partners to make sound ethical business decisions. The estimated proportion of revenue and each group of product is displayed in the table below

The idea of setting up a bakery in order to supplement the farmers’ Market as earlier on agreed by the partners was met with challenges after it was realized that it was difficult to acquire the relevant expertise and equipment needed to run the bakery during the Farmers’ Market operations in the first year. In order to demonstrate a scenario that was most conservative, the partners allowed themselves only a 4% increase during the second year in terms of revenues.  According to Clifford, the Framers’ Market could earn $2500 for storing cars in the building during the season of winter. This would ultimately increase the Farmers’ Market profitability and generate more income.

Cost of Goods sold

Percentage markups obtained from selling prices that were provided by owners of other large bakeries and markets together with the Farmers’ Dairy were used in calculation of the cost of goods sold as depicted in Exhibit 5

Exhibit 5: Markup on the selling price by the type of product

According to the above exhibits and other related, related information, it will be prudent for the partners to go ahead and buy the land with a view of setting up the Farmers’ Market. However, given the fact that the intended Farmers’ Market was more than the zoning allowance for the prime property of land that partners in Green Acres were investing in, it was prudent that the partners become patient until the Municipal signed the development agreement. Given the fact that the partners did not have a problem as far as the signing of the agreement was concerned, they should also be ready to persevere for the period that the development agreement together with the environmental assessment and the development of the land’s plan were signed and approved by the Municipal. This could eventually prove to be profitable for them. Given the fact that all the partners are well equipped with sound managerial skills, the purchase and ultimate construction of the Farmers’ Market on the proposed piece of land will eventually reap good results due to good management practices.

The partners should go ahead and buy the land with a view of establishing a Farmers’ Market but they should also ready to take risks. Any business man should be ready to take risks when starting any business. Among the risks include the fact that in the event the Municipal notified the public of the intended development on the proposed piece of land and the same was met by opposition from the general public, then it was factual that the development agreement will never be granted. The refusal by the Municipal to grant the partners the development plan will imply that the plan to establish a Farmers’ Market will eventually flop. This will de-motivate the partners since all plans they had for the piece of land could ultimately fall apart. Given the fact that the four partners cannot apply for the development agreement from the Municipal without first purchasing the land, it is vital that they go ahead with their plans of purchasing the land. Purchasing the land will enable the partners to apply for the development agreement from the Municipal and given the fact that they had some assurance from the Municipal officials, there were high chances that they could eventually be granted permission to develop or establish the Farmers’ Market on the proposed piece of land.  In conclusion, the partners should go ahead and purchase the land to set up the business venture.