25 The following was written as a part of an application for a small business loan by a group of developers in the city of Monroe A jazz music club in Monroe would be a tremendously profitable enterprise Currently the nearest jazz club is 65 miles away th

The conclusion of the loan application suggests that the new jazz music club would be very profitable based on the popularity of jazz music in the city of Monroe and some studies. While this conclusion might hold some water, it is based on some unfounded assumptions that, if not substantiated, dramatically weaken the persuasion of the prediction. Hence, the following questions must be answered.

First, are jazz fans willing to spend money in a music club? The club is predicted to be profitable based on the study that typical jazz fans spend around a thousand dollars each per year. But it is not clear where exactly the fans spend it. It is possible that most fans like to spend money on music festivals or collect collectibles or musical instruments. It is not sure that a large proportion of fans would like to visit a music club and would like to spend money on it. Moreover, the details of the study are unknown. It is possible that very few people spend a lot of money on jazz entertainment which resulted in the mean of a thousand dollars in the study which may not reflect the reality. a typical fan might spend a lot less on jazz entertainment. If fans do not like to spend money in a music club or typically spend less than it says in the study, the club would not be as profitable as it predicts, even if it may turn into a loss project.

Second, what percent of attendees in Monroe's annual jazz festival was actually from Monroe? To establish the popularity of jazz music in the city of Monroe, it has been said that over a hundred thousand people attended Monroe's annual jazz festival. However, it is very possible that a large number of people came to the festival from different cities. So, the number of attendees at the festival cannot represent the popularity of jazz in Monroe city. If a large number of people attended from different cities, predicting that the music club would be profitable based on the number of attendees at the festival would be wrong.

Third, where does the income come from for the jazz musicians who live in Monroe? Musicians live in Monroe; it does not mean that they preferred this city because jazz is popular here. It is possible that the city seemed more habitable to them in terms of other aspects such as nature, cost of living, etc. Moreover, the musicians may travel to other cities to do shows and albums to earn money. They may not agree or have time to show up at the music club which would help the club grow. If so, the claimed popularity of jazz in Monroe city would face questions and the club would not be beneficial from the musician.

Finally, what is the business condition of the nearest jazz club? It is said that the nearest club is over an hour away but is it a successful business? Is it popular? What is its revenue? Do people from Monroe visit there? Answering these questions to find how successful business the nearest jazz club is is important to predict the profitability of a new club. If the responses to the questions are negative, it will show that the new club will not be as profitable as anticipated.

In conclusion, the business loan application may have come to a sound conclusion regarding its profitability, but more data is needed to reach a firm conclusion. If the applicant answers the above questions, it will be possible to fully evaluate the application.