B-Spoke Bikes is a small bicycle sales and repair business located in a small local shopping street on the
outskirts of Swansea. The shop was ed 20 years ago by Dave and Bethan, a couple whose daughter Elen
sometimes helps out. Dave and Bethan employ Rhys as a mechanic as well as occasional casual helpers when
they are busy. With many years of experience in building and maintaining bikes, those involved in this small
family business would like to make full use of their medium sized shop and workshop to set up customised
bikes. With experienced sales and mechanics staff in the area who have worked part time over the years, the
business could easily expand. However, business in recent years has been slow and most sales have been cheap
off the peg mountain bikes. Dave and Bethan are concerned for the future of B-Spoke Bikes as sales in the
last year have declined even further, in some months the minimum ?2500 a month sales to cover basic costs
have not been achieved. Another current concern is the time Dave and Bethan need to spend on their outdated
manual stock control system.
Dave and Bethan are concerned for the future of the shop and are considering a number of options to turn
things around. One possibility is to widen sales opportunities to the whole of the UK with a new e-commerce
venture and they are considering possible solutions. As well as national sales opportunities, B-Spoke Bikes
could sell more specialised machines such as electric bikes giving more profit from an hour?s work
customising a bike. Elen is a recent Business Information Technology graduate and she would be willing to
spend time creating a customised e-commerce and stock control system for the business. Another solution is
to subscribe to a simple template based e-commerce service, although this might not be as flexible. A
different strategy to revive the family business would be to rent a city centre showroom. This would cost
around ?70,000 per year in rent and business rates.

Your Task:

Produce a Feasibility Study Report, including the following content:

Draw up a list of stakeholders for this project, giving a brief explanation of the effect of the project on
each.

Estimate the costs and benefits of the project, making reasonable assumptions based on the information
provided in the above scenario. You must give explanation for all costs and benefits and explain the
assumptions made, giving references to information sources. You should base estimates of costs and benefits
on your research, but please use consumer prices for costs and benefits: you are not required to investigate
trade prices which are not easily available. You should include two versions of your cost benefit analysis ?
one for a full featured system in the eventuality that a successful funding bid is accepted and one minimum
cost system if the funding bid is unsuccessful. Examples of costs and benefits to be estimated include
hardware, development software, hosting, time saved and time taken up developing the system, increased
sales,

Using your estimated figures, complete a cost-benefit analysis table for the customised and the template
based version of the project over 2 years. Calculate the Return on Investment based on each of the two
tables.

Making reasonable assumptions about interest rates, which you should discuss and explain, apply suitable
discount factors to your cash flow and discuss the impact of this on the return on investment. Give an
evaluation of how the current economic climate might impact on the proposed project?s viability.