Profits and Supply and Demand

Emily Evans

Profits and Supply and Demand

BUS/211

Sonya Ryals

December 14, 2015

The kind of business I am building is a home remodeling business. Our business offers a variety of services for your home. We specialize in full home rehabs, from plumbing to electrical to roofing. We can turn your out dated space into a modern area. We also have a trash removal service, not just for demolition projects but home clean outs. In order to properly function as a business, we need an office space for client meetings, a website for clients and potential clients to visit to inquire about or schedule appointments, a work van with the company banner on the side as well as other marketing material such as business cards and flyers, the office will also need a phone number, computers and a fax machine. For the trash removal part of the business we also need a dump truck to fill that particular service.

When looking at the differences between profit and profitability, I estimate that if an average full rehab of a small bathroom runs about $4000-$5000 including labor and materials, we will be looking at a potential 30% profit. In order to keep the profits up, I believe it will only be right to continue to put the money back into the business until we are completely settled into the position. With the money going back into the business, we can see where we are saving the most. We would need to develop a database so we can keep track of our costs by job. By having a visual of where the money is going, it will be easier to control our expenses and find ways to increase our margins.

In the business of fixing homes, both the laws of supply and demand apply. Estimates are drawn by the amount of work the client needs done x how much material and time needed to complete the project. Depending on the price of material at that time will better determine an accurate estimate of the project. The law of demand comes into play when the quality of our work is measured...