Posted: June 25th, 2015

How can Brodie help his business grow by investing in capital (goods) ?

Brodie’s Assignment: Case Study
⦁ Your job is to write a business plan that answers ALL the four “action plan” questions below.
⦁ Use your Economics textbook and additional resources (Chapters 1-5) to help you write this plan.
Things to consider about Brodie’s business
Your task:
You must write (in one document or presentation) all FOUR of the BUSINESS ACTION PLANS for Brodie – see links (on the left) for each PART for DETAILED instructions for each of the 4 plans
Write you plan as a document or slideshow, and save it as either a .pdf, .doc, .docx, .odt, .ppt, .pptx, or .txt file
Here is how your submission will be graded:
You have been asked to form a four-part business plan for Brodie to help him make some good business decisions.
This assignment is worth a total of 100 points.
You can earn up to 25 points for each of the four parts of the business plan.
Thoroughly answers question: 15 pts.
Make sure that you are responding to all parts of the question.
Your answer should show clear connection between the question and the overall course content. Your answers needs to represent an understanding and application of the concepts included.
Uses vocabulary to strengthen response: 10 pts.
Things to consider about Brodie’s business (make sure to quote & cite this page)
Please review the sources and considerations below to help you write your four “business plan actions”:
Background : There are several steps, materials, and tools involved in making surfboards. The basic materials needed are foam, fiberglass sheets, resin, and catalyst. To hand-make a board, the builder will need a saw, electric planer, cheese-grate planer, sand paper, gloves, respirators, a broom, good fluorescent lighting, squeegies, and a space big enough for all of this stuff. Building a board is broken up into several steps. Check out this website to see some of the details. Keep in mind that these represent only a part of the process.
Here’s a video that shows you all the steps in creating a surfboard:

Brodie’s professional considerations:
Brodie is a surfboard builder. He is currently doing all the stages of production, from the first cut of the foam, to the final stroke of the resin to laminate the board. Since Brodie is an experienced shaper, it takes him about 2 weeks to shape and laminate a board so that it is ready to ride. (few hours on shaping and up to two weeks on the lamination and curing.) Brodie has a number of costs to consider when he is making and selling his boards.
⦁ Basic costs: surfboard blank: $75
⦁ Rent on the space $100/month
⦁ Resin: $15/per board
⦁ Fiber glass cloth $21/per board
⦁ Hours of labor 12 hours/board
Plan 1- Human Capital Considering the information provided in instructions, the best plans will include: – A definition of human capital as it applies to Brodie’s business – How many workers Brodie should employ, if any – What tasks workers should perform – How many workers would be *too many* – Supporting statements that show the student utilized available resources in the course – Citations/sources for quoted and/or paraphrased content.Maximum mark 25
Part One- answer this questions in your plan for Brodie:
How could Brodie invest in human capital (human resources) to grow his business?
Options Brodie has:
⦁ The local laminating shop told Brodie that they would laminate his boards for $150 a board. (The average cost per board is $170).
⦁ There are several people who have asked if Brodie needs any help around the shop shaping, sanding, sweeping etc… They are willing to work for $10 an hour.
⦁ There are two other surfboard shapers in Brodie’s town
⦁ Brodie is a great surfboard shaper. He can shape a board pretty quickly and deliver a good product. He feels that he is a bit slow at glassing though. He spends about an extra 2 hours per board than many of the other laminators that he knows.

Plan 2- Capital Goods Considering the information provided in instructions, the best plans will include: – A definition of capital as it applies to Brodie’s business. – Capital goods that Brodie’s business requires. – Strategies he might use to obtain capital goods that will increase his profit. Brodie must have – Supporting statements that show the student utilized available resources in the course – Citations/sources for quoted and/or paraphrased content.Maximum mark 25
Part Two- answer this question in your plan for Brodie:
How can Brodie help his business grow by investing in capital (goods) ?
A complete response will include a definition of capital, specific examples of Brodie’s capital, and HOW he should specifically use and invest in each good to help his business grow.
Some points to consider about Brodie’s physical capital:
⦁ The town that Brodie lives in has just passed a law that lifted the tax on the use of the foam that he uses to makes his boards.
⦁ With the rising of oil prices, the cost of his foam and his resin (oil based products) has been rising over the last several months.

Plan 3- Determining supply Considering the information provided in instructions, the best plans will include: – Explanation of demand, supply, and marginal benefit as they apply to Brodie’s business. – Advice for Brodie on how to use a production schedule (Chart 5.6) to maximize efficiency in production and avoid diminishing returns. – Supporting statements that show the student utilized available resources in the course – Citations/sources for quoted and/or paraphrased content.Maximum mark 25
Part Three- respond to this in your plan for Brodie:
Explain the factors that will affect how many surfboards Brodie should produce (supply).
⦁ This is where you show Brodie how the laws of supply and demand work.
⦁ Use chart 5.6 in Chapter 5 of your textbook again (also in Part 2) to see how businesses work toward profit maximization and use marginal analysis.
⦁ You should also discuss how the concepts of marginal cost and diminishing returns apply to Brodie.

Plan 4- Incentives for growth Considering the information provided in instructions, the best plans will include: – Types of monetary and/or non-monetary incentives that might be used to grow Brodie’s business – Incentives for all participants in the circular flow: Brodie, consumers, employees, and the community/local government – Supporting statements that show the student utilized available resources in the course – Citations/sources for quoted and/or paraphrased content.Maximum mark 25
Part Four- answer this in your plan for Brodie:
What are the incentives that Brodie should consider while trying to build his business?
Include possible incentives for the local government, the customers, his staff, and himself. There are monetary and non-monetary incentives, so consider both.
Sources related to incentives:
⦁ When entrepreneurs succeed in their business ventures, more goods and services are available for consumption. Successful business ventures also increase the employment opportunities available to people within an economy. As you have seen, there are many risks involved in starting your own business. While there are various business structures available, you can never avoid all possible risks when creating your own business.
⦁ There are many incentives that entrepreneurs consider when assuming the risks involved in creating their own business. A business owner may be motivated by the incentive of a sense of satisfaction involved in provided a certain good or service to the community. Often times, entrepreneurs enjoy the sense of being their own boss and some of the potential and hard earned freedoms that come along with that responsibility.
⦁ The expectation of a profit is a common incentive for many entrepreneurs. They believe that they can offer a good or service that will make them
⦁ The town that Brodie lives in has just passed a law that lifted the tax on the use of the foam that he uses to makes his boards.
⦁ With the rising of oil prices, the cost of his foam and his resin (oil based products) has been rising over the last several months