Marie has completed her interactive design program at SFU and is launching her own business called, Brand You, a small boutique logo and marketing company where she can help small businesses with their marketing piece. The benefit is that she can work from home and meet clients on site. She can design logos and print materials such as business cards, thank you cards and brochures. At the same time, some clients have asked her to take over their social media outreach because the client would like to concentrate on their business as opposed to doing the marketing out reach. As a result, Marie has created two marketing packages.

The first package is a basic marketing piece where she will design and create the business cards, thank you cards and brochures. She has created a flat rate that she will charge her clients $250.

The second package is for a social media bundle, she will charge $40 per month and that will cover doing 4 Instagram posts, 4 Tweets and 4 Facebook posts a month.

Based on market research, Marie knows she can easily find 4 clients per month for package 1 and 10 clients per month for package 2 and will not take on more clients due to personal constraints. She can only do option 1 or 2 but not both.

While working from home, Marie will pay $150/month for business insurance and $30/month

for additional business telephone service. She also will need to pay $60 a month for digital

design software with either marketing package. With the first package, Marie will need to pay $120/month for the supplies, her equipment will cost $1200 upfront with an annual

maintenance bill of $360.

If she goes with the second package, she will have to upgrade her phone to one with a bigger screen to be able to accurately check her work on mobile versions of social media platforms that will cost $1130, however she can sell her current phone for $600. Marie also will need to pay $25/month for social media management software subscription. When setting up a business, she is expecting to incur $550 in legal and administrative costs.

Do a breakeven point (in units) based on this information for each month for the first year only. Please show your calculations to get the marks.

a) Briefly share what the breakeven point determines (why we need to know what it is), what is the formula for breakeven point (in units) and define mark up. 1 mark

b) How many packages would Marie need to sell in total until reaching a breakeven point for the first option? 2 marks

c) How many subscriptions would Marie need to sell until reaching a breakeven point for the second option? 2 marks

d) Explain which is the better option and why applying the results from your calculations. 2 marks