Monday, January 31, 2011

Thesis Proposal

My emphasis: Business Management & Spanish

The problem that I would like to write about: After spending five years in Argentina and Uruguay I realized that there were many business opportunities there. Over the years and through the course of my studies here at UVU I came up with the idea of starting a business that imports products from these countries to the US for resale.

This is one reason why I choose the Integrated Studies program so that I could develop a good background and knowledge in the two areas that would aid me in this goal. This senior thesis is the perfect opportunity for me to develop a good business plan and overcome many of the challenges that I will face as I set up an importation network. The project will address every aspect of the business and be a guide for me to launch it after graduation.

The Business Plan: My initial plan is to start out small with a limited number of products primarily in Uruguay and Argentina and later expand my product line in other countries as well.

Products: Some of the products that seem like good options from Uruguay and Argentina include automobiles (classics and non-US models), auto parts (engines, transmissions, etc.), specialty food items, and other random goods (leather, art, and cheap goods for resale).

Advantages: These products were selected for specific reasons but other overall advantages exist such as the value of the dollar vs. foreign currency. It is amazing what can be purchased with very little cash in South America. The poor economy and third world status of these nations also aids my buying power and keeps prices low. I am also benefiting the sellers.

Automobiles are a good option for exportation for many reasons. Many of the same models that we in the US consider classics, rare, or very valuable are prevalent throughout these countries. Thousands were exported from the US and many of them are still being driven on the street and can be purchased for very cheap because they do not have the same status there. Also there is a very small collector market there so the prices have not been driven up.

Engines are a great option because recently the prices of gasoline became very expensive and most car owners swapped out their engines for diesel engines. This means that there are thousands of discarded gasoline engines that can be purchased for extremely cheap. Most of these are the same models that are found in common vehicles in the US. Other auto parts could be purchased new or used as well.

Many major manufacturers sell vehicles in South America that are not sold in the US. Some of the models are variations of models that are sold here and some are highly coveted discontinued US models (such as the Toyota FJ40 Land Cruiser which was still being built in Brazil until 2001).

Specialty food products from many South American countries are a good option because they are not available at least here in Utah. Many food products are desired by immigrants from these countries as well as people who have lived in these countries (LDS missionaries).

Many opportunities exist to import smaller random items such as art, leather, clothing, etc. because of their cheap cost and/or quality.

Challenges: Many challenges exist in making this business successful and even possible. First and foremost is the physical distance between locations. Travel to South America is very expensive and will have to be kept at a minimum through the use of technology. Shipping is complicated and expensive if large items are being sent. Customs and other laws and regulations regarding imports will have to be addressed to determine which products will be viable options. Finding trustworthy contacts in South America who can locate products and manage their end of the business could be difficult. Obviously the language barrier is a challenge as well as is the initial funding of the business. I also need to create a plan for how to distribute products once here in the US.

Conclusion: This project will require intense research as well as the use of the knowledge that I have gained through my Integrated Studies degree. This is a topic I am interested in on many levels including, Spanish language/culture, running my own business, and my love for cars and food.

5 comments:

  1. James,
    it seems to me that you have set yourself a very difficult, complicated, and potentially wonderful task

    You've got a good background in the region -- 5 years there -- and your very specific interest in cars (and food) ought to serve you well.

    So, how will you proceed from here?

    I recommended that you speak with Professor David Knowlton, of the Behavioral Science/Anthropology department at UVU. At one point he ran a company similar to the one you're proposing (although there were no cars involved). I'm guessing he'll have a wealth of information. Tell him I suggested you talk with him.

    Do you know the non-profit 1000-Villages store or stores? I sometimes stop in at their SLC/Sugarhouse store (I think it's still there, although it has been several years and that block has undergone lots of renovation). They import things from all around the world in an attempt to help the people who make the things.

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  2. James,

    I second Scott's recommendation that you talk to David Knowlton. I know very little myself about the import/export business (other than that it can be very high-risk and very lucrative). Are there any model businesses that you can research to help you avoid the most common pitfalls?

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  3. This seems like a very big and exciting project! My main question is "When will you know when your project is complete?" You mentioned doing a business plan. Is this something that you plan to try to completely complete for your Sr. Thesis, or do you plan to develop it more fully after graduation?

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  4. Okay first, I think this is a great idea and perfect to do for a project. I think it would be great to have your own business doing this sort of importing to the US. Not only does it seem like a good investment, it would mean you would get to travel back and forth... My main question/concern I have when I what you have so far is what product or good would you make the most profit on. I would think you have would have to a lot of research to find out what would be the best to import, so you could concentrate on one item. Unless you really want to specialize in different things, but it seems starting with one would be a place to start.

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  5. Hey James, que ashe che!

    Thank you. I am more familiar with "exporting" since that is what my father does from Peru to Europe. In your case it gets extra challenging/fun since you have to get the goods out of the US. It is a great idea to start small. Since I am more familiar with things Peruvian goods, there are many of them (souvenirs, home decorations, clothing items, etc) that I am sure people would be interesting in acquiring. If I am not mistaken, my dad was looking into that at some point, but he decided to stay with the exportation of small animals. I'll asking him. He is coming to Utah in March for a few weeks, maybe you two should have a conversation about this export-business.

    See you in class.

    Jarry L.

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