Business_Proposal_Eco_561

Running head: Business Proposal Business Proposal: Clear Hear Shalonda Kizer ECO/561 02/22/2010 Joseph Broberg Memorandum To: Clear Hear Employees From: Corporate Sales Office Date: 02/22/2010 Subject: Increasing Revenue CC: Board of directors This business proposal is designed to provide recommendations to Clear Hear for increasing revenue for the company, achieve ideal production levels, determine how fixed and variable cots should be adjusted to maximize profits, and identify methods to reduce cost. By the end of this proposal Clear Hear will have a guide to follow to make these recommendations successful to allow for a more productive company. Accomplishing the key objectives in this proposal are going to require a few minor changes in production. Although changes are being made Clear Hear will continue to follow the key values of Clear Hear. Clear Hear will continue to keep the employees working, provide all of the customers with a quality product on time, and that will meet or exceed the customers expectations, as well as treat our business partners the same as we would like to be treated(University of Phoenix, 2010). In order to begin to increase the revenue of Clear Hear we must begin by finding ways to minimize the expenses or cost that exist. By minimizing expenses it is likely that profits or revenues will increase. Fixed costs are those costs that in total do not vary with changes in output(McConnell, C.R., 2009 p.159). An example of some of the companies fixed costs could include the rent payment on the factory and the factory’s insurance premiums. Variable costs are those cost that change with the level of output(McConnell, C.R.,2009 p.161). Since variable costs can change we will start by minimizing or eliminating some of these costs. Some ways we can minimize or eliminate these costs are to regulate the utilities of the company. Other examples of the companies variable costs can include labor costs, cost of the material, and transportation for deliveries of the product. Clear Hear can start by buying less expensive material with the same quality of product. It is important to minimize the variable cost because as production increases the variable costs can also increase which can cause the company to have a smaller profit. The idea of increasing the revenue of the company does not just depend on the work of the corporate staff it begins with the employees. In order to achieve the highest production levels each working employee will be required to maintain a quota of products to ensure the appropriate amount of cell phones are being produced or sold as they should be. Driving expectations is one way to become successful in the cell phone industry. According to Small Business Digest, the company that can drive expectations-among customers, distributors, and/or referral agents-to the highest level has the greatest immediate influence in the marketplace. Having the greatest influence can allow for more units to be sold which will in turn also allow for the company to establish higher revenues. Another way to focus on driving expectations will be to continue to focus on the quality of production. In order to ensure the cell phones are being produced correctly and a profit is being made Clear Hear will be using Original Equipment Manufacturer to complete the future orders. OEM has a good quality rating and can produce more units at a more affordable price. This recommendation to switch to OEM is a better option for Clear Hear because the OEM product will still have the same quality as the Clear Hear product just at a lower production price. Clear Hear will also be able to eliminate some of the unnecessary positions within the company to cut back on the labor cost which is a variable cost. Clear Hear will be able to eliminate some of those positions since it is considering having production processed by OEM. Which will reduce production cost for Clear Hear to generate more revenue. In order to begin these recommendations Clear Hear will establish and maintain a chain of command to include liaisons for each division. If each division of Clear Hear works on a different recommendation the success of the company will take less time to accomplish than expected. From reviewing the Clear Hear scenario I gathered several positive key components about the company. Clear Hear appears to have dedicated workers that are productive and dedicated to performing their tasks. The scenario on numerous occasions expresses the limits of research Kendra has done in order to accomplish the task of finding an appropriate offer to help with the production of Clear Hear. The values of the company are also very positive. Companies that practice good morals and values are needed in today’s tough economic times. All of the Clear Hear employees should be proud to be apart of Clear Hear. References McConnell, C.R., Brue, S.L.& Flynn, S. M.(2009).Economics: Principles, Problems, and policies(18th ed.). New York: McGraw Hill/Irwin. Six rules for increasing revenue and profits. (n.d). Small Business Digest, (), . Retrieved from http://www.2sbdigest.com. University of Phoenix. (2010). Clear hear scenario. Retrieved from University of Phoenix, ECO561 website.