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Papa Geo’s – Restaurant Budget Pitch For 2012 , 2017 BUSN-278 [Term] Teacher[name] DeVry College or university , , , , , , , , , , , , , , , , – Desk of Articles Section| Title| Subsection| Title| Page Number| 1 . 0| Executive summary| | | | installment payments on your 0| Revenue Forecast| | | | | | 2 .

1| Sales Forecast| | | | 2 . 2| Methods and Assumptions| | a few. 0| Capital Expenditure Budget| | | | 4. 0| Investment Analysis| | | | | | 4. 1| Cash flows| | | | four. 2| NPV Analysis| | | | 4. 3| Rate of Return Calculations| | | 4. 4| Payback Period Calculations| | 5. 0| Pro Manera Financial Statements| | | | | | five. 1| Expert Forma Salary Statement| | | | 5. 2| Pro-Forma Earnings Statement| | | | 5. 3| Pro-Forma Stability Sheets| | 6. 0| Works Cited| | | | six. 0| Appendices| | | | | | several. 1| Appendix 1: [description]| | | | six. 2| Appendix 2: [description] etc| | * 1 ) 0 Executive Summary 1 . 0 Business Summary 5. * This budget pitch is for the starting and running of a single location, sit-down Italian restaurant known as Papa Geo’s.

The cafe would be found in Orlando, Fl and could majorly target middle to lower-middle course families with children, and also adults and seniors, thus making it a friendly and relatives place. The product and service furnished by the cafe would be Italian language food dished up buffet design with a great all-you-can-eat formatting with a lot of variety together with a salad club, pizza, several different types of pasta with three or four types of gravies, soup, desserts, and a self-serve soft drinks bar. Generally there would also be a gaming area within the restaurant with gaming equipment installed which in turn would be of interest to children.

The business gives wholesome and fresh food, within a simple structure, with very good prices which is located in a densely inhabited area, all of which would ensure that the restaurant to complete well and establish by itself as a popular and lucrative business. * * * Also, give a second paragraph which explains how the budget supports you can actually strategy. * * Finally, provide a third paragraph to summarize the important thing points from the budget, such as the planning intervalle, the amount of forward investment, the NPV, Repayment and IRR of the task, as well as crucial figures through your income declaration, cash flow statement, and “balance sheet”. * Keep in mind, this is not a thesis or introduction of what you will speak about – it contains the major, specific content of each section. The other and third paragraph must be written once you have completed other sections of this template. * * Whenever you complete sections of this template, please remove all italicized text in all of the sections of this kind of template and replace it with your own or you will forfeit points! 5. * installment payments on your 0 Revenue Forecast installment payments on your 0 Revenue Forecast 2. * It forecasts the sales of Papa Geo’s restaurant more than a five-year period.

Section installment payments on your 1 shows the estimated product sales figures and a brief description on the changes in these characters over the planning period. 5. Section 2 . 2 goes into the details of how this sales estimate has been reached, calculations engaged and the methods and presumptions used in the process. * Overall, this section is advantageous is providing an estimate of how very much the restaurant can make in sales, offered its inner specifics and external environment. * installment payments on your 1 Product sales Forecast 5. * The yearly sales forecast intended for Papa Geo’s restaurant has below.

In $ | Year 1 | Year 2 | Year a few | Season 4 | Year 5 | Product sales | 933, 504. 00 | you, 555, 840. 00 | 1, 616, 517. seventy six | 1, 679, 561. 95 | 1, 745, 064. 87 | 5. My strategies and presumptions for arriving at the product sales figures in the table are detailed in section 2 . 2 The sales figure estimated per my measurements is taken as the sale number for Season 2 . It is because the sales figure arrived at from the computations cannot be believed to be product sales for Yr 1 while the restaurant might not be capable to realize their full potential and entice the estimated number of clients from day one itself.

Also, teething difficulties with marketing, operations etc may well not lead to the best sales. Consequently , we is going to project just 60% of the figure while first yr sales and use the predicted figure as the revenue figure pertaining to Year installment payments on your Over the preparing period, beginning with Year 2 onwards, revenue are expected to grow at a rate of 3. 9% every year, consistent with industry estimations of the normal growth of the restaurant market in the US (Source: Mintel Worldwide, cited in section six. 0). 2. * installment payments on your 2 Strategies and Presumptions * In line with the brief presented on Progenitor Geo’s cafe, there are about 10, 000 families living within 15 minutes of the cafe. Of these, among 3% and 5% happen to be rich households (Phoenix advertising international, Wikipedia) and it is believed that an additional 15% include high salary and uppr middle category households. That leaves regarding 80% of the 10000 families in the location, that are the prospective market intended for the cafe. * 2. According to a research newspaper (in cafe. org), American families eat out regarding 4 times every week.

However , considering that our target market comprises of mostly middle and lower income households, I’ve believed that they eat out only about 2 times weekly on an typical. This means that, regarding 16000 families [(80%*10, 000)*2] eat out in a week in this area in Ohio, Fl. * 5. In terms of competition, although it is definitely mentioned that McDonalds, Palabrota Bell and Wendy’s function in the area, we assume there are different small spots that people may possibly visit to consume out. As well, people may possibly venture out beyond their areas to eat away.

Keeping these in mind, we now have assumed why these four places (Papa Geo’s, McDonald’s, Jaleo Bell and Wendy’s) should be able to capture no more than 85% of these families. (16000*85%=13600/week). Of these 4 places, because the others are fast food and fast food eating places generally control a larger footfall than other formatting restaurants all of us assume the next about their discuss in the cake of family members: Taco Bells: 30%, McDonald’s: 30%, Wendy’s: 30% and Papa Geo’s: 10% 5. * i. e, Progenitor Geo’s can get to capture 1360 (10%*13600) families per week.

Due to the fact that this is a relatives dining place, we generate another assumption about the composition with the family. All of us assume that out of a family of 4, two are youngsters and two adults. Meaning that about 2720 (1360*2) kids and 2720 adults (1360*2) will take in from Sopas Geo’s a week. * 2. Given that dinner (including drinks) cost regarding $7, all of us make the subsequent assumptions: * Adults visiting the restaurant could have meals (@ $7), with an average. 2. Kids visiting the restaurants using their families is likely to make a bill of approximately $4 every head. Given this, we now calculate the each week sales for adults and kids. Therefore , d * Sales coming from Adults each week: 2720*7 sama dengan 19040 5. Sales from Kids per week: 2720*4 = 10880 * 5. Now, the total sales (both adults and children, as part of families) per week can be estimated for: 19040+10880 sama dengan $29920 2. Therefore , typical sales each year = you, 555, 840 * The sales physique estimated by these measurements is accepted as the sale number for Year 2 . It is because the product sales figure arrived at from the computations cannot be believed to be revenue for Season 1 since the cafe might not be able to realize the full potential and entice the approximated number of consumers from 1 itself.

Also, teething difficulties with marketing, procedures etc might not lead to optimum sales. Consequently , we will project just 60% of this figure while first 12 months sales, and use the predicted figure since the product sales figure intended for Year installment payments on your Over the planning period, starting from Year 2 onwards, revenue are expected to grow at a rate of 3. 9% every year, in accordance with industry estimates of the common growth of the restaurant industry in the US (Source: Mintel International, cited in section 6. 0). * * * * * * * * 5. * 2. * * * 5. * * * a few. Capital Costs Budget several. 0 Capital Expenditure Spending budget * 2. Capital Spending Budget: 5. Item| Cost| Quantity| Total cost| Source| Notes and Assumptions| Expense of registering a business| 300| | 300| ehow. com| Cost of joining includes: genuine cost of joining ($70), attorney expenses and misc expenses (approx $230)| Remodelling of facility| 15000| 1| 15000| Given| This includes all sorts of beautification etc that the restaurant needs to start operations| Soft drink fountain bar| 3621| 1| 3621| Soda-dispenser. om| Prices quoted may or may not be the same for later dates| 2 french fries ovens| 849| 2| 1698| ebay| Prices quoted could possibly not the same for later dates| salad and Pizza/dessert bar| 1450| 1| 1450| ebay| Prices quoted may or may not be a similar at later on dates| Business Refrigerator| 3529| 1| 3529| Coldtechcommercial. com| Prices quoted may or may not be precisely the same at later on dates| Cash Register| 170| 2| 340| ebay| Prices quoted might or might not be the same at later dates| Video game vending machine| | | | | |

Type 1| 550| 2| 1100| ebay| Prices quoted may or may not be a similar at later dates| Type 2| 750| 2| 1500| ebay| Prices quoted could possibly not the same by later dates| Laptop for management| 275| 1| 275| ebay| Laptop computer purchased with Warranty, Cost quoted may or may not be the same in later dates| desk to get mgmt| 25| 1| 25| ebay| Rates quoted could possibly not the same in later dates| Staff Microwave| 319| 1| 319| ebay| Prices offered may or may not be similar at after dates| Staff cupboard| 100| 1| 100| Assumed| | taff refriferator| 700| 1| 700| ebay| Prices offered may or may not be the same at afterwards dates| Dining tables for the restaurant| 279| 20| 5580| tableschairsbarstools. com| Prices quoted may or may not be similar at after dates| Ergonomic chairs for the restaurant| 55| 80| 4400| restaurant-services. com| Prices offered may or may not be precisely the same at afterwards dates| Busing cart intended for restaurant| 50| 1| 50| ebay| Prices quoted might or might not be the same in later dates| Commercial dishwasher| 2500| 1| 2500| ebay| Prices offered may or may not be a similar at after dates| Cafe signage| 124| 1| 124| brightledsigns. om| Although this really is a form of advertising and marketing, this didn’t be considered while an operating cost presented the long term (more than a year) nature of its use| Total|  |  | 42611| | | * * The above desk provides an estimation of the capital budget necessary for Papa Geo’s restaurant. For every single item, resources and assumptions used happen to be explained on the right aspect of the table. Other common assumptions over and above those already stated are provided below: * Miscellaneous cooking and handling equipment cost will probably be considered detailed expenses and definitely will not become capitalized provided the short-term (less compared to a year) make use of such possessions.

Cutlery, ingesting cups and so on would be considered to fall into similar category| 2. The total cost of registration is regarded as as capital expenditure because of its long term character of use| * Any kind of fixtures just like lighting and many others are considered since operational expenditures and will not be capitalizedThe total capital budget needed is US$ 42, 611. Major component of this finances are renovation and gear costs, which is true of restaurant businesses. | 5. * * * 4. 0 Investment Analysis some. 0 Investment Analysis 5. 4. 1 Cashflows * Year 1| Year 2| Year 3| Year 4| Year 5| Sources of Cash| | | | | | Total income (from food and vending machines)| 9, 35, 944 | 15, sixty one, 492 | 16, twenty two, 390 | 16, 85, 664 | 17, fifty-one, 404 | | | | | | | Uses of Cash| | | | | | Cost of Food| 282880| 294195. 2| 305963. 008| 318201. 5283| 330929. 5895| devaluation on equipment| 3069. 2| 3069. 2| 3069. 2| 3069. 2| 3069. 2| Salaries| 348636| 362581. 44| 377084. 6976| 392168. 0855| 407854. 8089| employee benefits| 21887. 2| 22762. 688| 23673. 19552| 24620. 2334| 25604. 92827| utilities| 24000| 24000| 24000| 24000| 24000| credit card fees| 23, 473. 60 | 39, 037. 30 | 40, 559. 76 | 42, 141. 59 | 43, 785. 11 | inventory having costs| two, 347. 36 | 3, 903. 73 | 4, 055. 98 | some, 214. sixteen | four, 378. fifty-one | advertising and marketing and marketing| 15, 000| 10000| 10000| 10000| 10000| Rent| 630000| 630000| 630000| 630000| 630000| Insurance| 1000| 1000| 1000| 1000| 1000| interest| 13320| 13320| 13320| 13320| 13320| ncome , opex (for purposes of tax calculation)| (4, dua puluh enam, 669)| you, 57, 623 | 1, 89, 665 | two, 22, 929 | a couple of, 57, 462 | Taxes| , | 42, 558. 10 | 51, 209. 42 | 60, 190. 80 | 69, 514. 82 | add back depreciation ( non-cash expense)| 3069. 2| 3069. 2| 3069. 2| 3069. 2| 3069. 2| | | | | | | Net Funds Flows| (4, 23, 600)| 1, 18, 134 | 1, forty one, 524 | 1, sixty-five, 807 | 1, 91, 017 | * 5. * Features and Presumptions: * In this cash flow analysis, only operating activities are thought nd it is assumed that there are not any investing and financing money flows that may have material impact on the organization * Normal meal expense $4 in materials and labor, costs expected to boost about 4 percent 12 months , exactly like increase in revenue. From the sales forecast webpage, it is assumed that 1360 people eat at the restaurant per week * Gear cost depreciated over a 5 year period, on a straight line basis * Wages assumed to grow around 4 percent per year 2. Cost of rewards to increase by 4 percent , equal in porportion to incomes * Bills assumed to average to the year and also the years 5. Given: 2 . % of sales 2. 10% of following month’s sales has. For the whole yr, assumed in 10% with the year’s product sales of foodstuff only. Vending machine sales not included 2. Assumed being higher in the first year and then common out in lesser price over the next 4 years * Rent assumed to become 15 us dollars per sq foot 5. It is assumed which the entrepreneur have a 100k loan * Believed tax rate to be twenty seven percent. Real tax price is slab-based and may change * Contains all capex items apart from costs of registration and renovation expenditures 4. 2 NPV Evaluation * Fascination rate| 15%| | | | | | | | | | |

Year| 1| 2| 3| 4| 5| Cash Flow| (4, twenty three, 600)| 1, 18, 134 | one particular, 41, 524 | you, 65, 807 | you, 91, 017 | PV factor| 100%| 87%| 76%| 66%| 57%| PV of money flow| (4, 23, 600)| 1, 02, 725 | 1, 07, 013 | 1, 2009, 021 | 1, 09, 214 | Cumulative PV| (4, 23, 600)| (3, 20, 875)| (2, 13, 863)| (1, 04, 842)| 4, 373 | Net Present Value| 4, 373 | | | | | 5. * Illustrates and Presumptions: * Just like be seen to sum up table, the net present worth for the project is definitely positive which will shows that the project should be pursued. Interest of 15% has been used for computation, assuming that the project would be financed with debt considered at the rate * some. 3 Price of Go back * Cost of Capital| 6%| | | | | | | | | | | Year| 1| 2| 3| 4| 5| | | | | | | Net Funds Flow| (4, 23, 600)| 1, 18, 134 | 1, forty one, 524 | 1, 66, 807 | 1, 91, 017 | PV Factor| 100%| 94%| 89%| 84%| 79%| PHOTOVOLTAIC of net cash flow| (4, 23, 600)| one particular, 11, 447 | one particular, 25, 956 | one particular, 39, 215 | 1, 51, 303 | Cumulative PV| (4, 23, 600)| (3, 12, 153)| (1, 86, 197)| (46, 982)| 1, ’04, 321 | Net present value| one particular, 04, 321 | | | | | | | | | | IRR (Internal rate of return)| 15%| | | | | * * Highlights and Assumptions: * The job presents an interest rate of come back on 15% which can considered to be attractive, while against a cost of capital rate of 6% 2. 4. four Payback Period * Offer a screen shot of your Stand out calculation from the payback period for this endeavor. * Year| 0| 1| 2| 3| 4| Cash Flow| (4, 23, 600)| 1, 18, 134 | 1, forty one, 524 | 1, sixty five, 807 | 1, 91, 017 | Payback| NA| N/A| N/A| N/A| installment payments on your 99| 2. * Features and Assumptions: * The project provides a payback period of 2 . on the lookout for years, essentially it would pay back for itself in about three years’ period. * * 5. zero Pro-Forma Monetary Statements a few. 0 Pro-Forma Financial Statements * 2. In this section, the future financial statements of Papa Geo’s restaurant happen to be presented based on certain thought events and transactions. They are really an active preparing tool and tend to offer an indication of the company’s performance in the future based on certain presumptions. * * Pro-Forma Salary Statement | Year 1| Year 2| Year 3| Year 4| Year 5| |  |  |  |  |  |

Total Sales| 938, 944 | you, 561, 492 | one particular, 622, 390 | you, 685, 664 | 1, 751, 404 | Total Variable costs| 657, 337 | 699, 718 | 727, 663 | 756, 725 | 786, 948 | Contribution Margin| two-hundred eighty-one, 607 | 861, 774 | 894, 727 | 928, 938 | 964, 456 | Total Fixed Costs| 708, 276 | 704, 152 | 705, 062 | 706, 009 | 706, 994 | Total Salary before Tax| (426, 669)| 157, 623 | 189, 665 | 222, 929 | 257, 462 | Tax Expense| 0| 42558. 014| 51209. 41996| 60190. 80097| 69514. 82326| Net Income| (426, 669)| 121, 064 | 138, 455 | 162, 738 | 187, 947 | * * Assumptions and Highlights: * This kind of Pro Programa Income Sheet is prepared in Contribution format. A contribution profits statement destroys costs down between varying costs and fixed costs. Contribution income affirmation is only an internal financial organizing tool and cannot be presumed to echo accounting norms or methods like IFRS etc . * All sources for statistics are the same as stated in Cash flow analysis (section 4. ) * Even though salaries worked out are based on specifics given in the project description of Sopas Geo’s, the assumption is that they will fluctuate according to sales and that the company might hire or perhaps fire based on business volumes of prints * 5. 2 Pro-Forma Cash Flow Statement * Give a screen taken of the cash flow statement and describe the impact of the spending budget on cash balances. 5. 5. a few Pro-Forma Equilibrium Sheets Provide a screen shot of your harmony sheets, and describe essential figures that they contain. 2. 6. zero Works Reported 6. zero Works Reported Market Research site: http://www. marketresearch. com/Mintel-International-Group-Ltd-v614/American-Families-Dining-6166418/ Cafe. org: http://www. restaurant. org/tools/magazines/rusa/magarchive/year/article/? articleid=138 Wikipedia: http://en. wikipedia. org/wiki/American_upper_class Ehow. com Soda-dispenser. com Coldtechcommercial. com Amazon tableschairsbarstools. com restaurant-services. com brightledsigns. com * 5. * 7. 0 Sortie 7. 0 Appendices 2. * NOTICE: Start it at the top of a brand new page. This section of the spending budget proposal can be where you are going to attach all the supporting elements that you’ve referenced in the preparation of your strategy, and that is too detailed or perhaps extensive to get included in the body of the report. Use this site to separate the appendices through the text within the body of your report. Make certain that you update the table of contents to feature the title of each and every exhibit in the appendix and its particular page amount. 7. 1 Appendix you: [put a description here] several. 2 Appendix 1: [put an outline here] 7. three or more Appendix you: [put a description here] 5. *

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