Question

Pick an opportunity.

What is the opportunity? (From export.gov)

Give your opinion as to the viability and profitability of this venture. If you had the resources, is this something you would invest in? Why or why not?

Answer 1

The site provides information, education, and various opportunities relating to export. All this actually help the US people.

Opportunity: The opportunity is to do export business of “pet resins”. This is the raw material of pet bottles and very much demanded in some European countries. Pet resins could be manufactured in the US through automatic machines (capital intensive program) and then could be exported to the producers of pet bottles of those countries; therefore, this is B2B marketing.

Opinion: The project is viable because of the following reasons:

1) The government gives 30% tax relief for the first 5 years of project.

2) Since the project is capital intensive, acquiring machines from domestic suppliers on easy installments would not be a problem.

3) Since the project is not labor intensive, searching and finding skilled labors would not be a headache.

4) The country’s government wants to boost up export because of earning foreign currency; it actually reduces export formalities and procedures.

5) The project is informed to a bank; the bank is ready for working capital funding.

Profitability: Annual profitability for first 3 years are 5%, 4%, and 6%. This is calculated as [(Net income / Net revenues) × 100]. Since then it increases in each year and makes a pick to 25% at the end of 10^th year (projected profitability is calculated up to 10 year). Therefore, the profitability of the project is also very high.

I should not invest in the project right now but may be later. This is not the question of having resources; the project requires technical experience in the field of production, accounting, and finance, which I don’t have right now. I don’t have maturity as well for dealing with complex situation; therefore, I need to do job in such industry first before going into own business.