Start Up costs
The start-up costs for the restaurant are estimated and budgeted at $ 11,100. The start-up cost is to get raised from taking the loan from the bank that supports small business through offering loans with low-interest rates. Since I opted to start-up the business rather than taking an existing restaurant from someone, I have employed a general contractor who is an expert and have a lot of experience in constructing the restaurant at a fee of $ 500. As the business is simple compared to other companies, despite the competition from the other firms that offer the same service, the business will start by some few elements considered essential. Stoves get budgeted for $200, also those who would need the seats have an additional of $1200 budgeted for the table seats. To keep the food staffs safe and fresh, there will be two refrigerators that get budgeted for $2000. For the start-up, there will be the use of fryers budgeted for $ 800, booths $ 400 and the ovens $ 4000. The key ingredients for the start have a budget of $ 500. Since the business will entail accounting, that is, balancing my purchases and the sales and besides having the payroll for those who will be assisting, I will open a bank account. I will debit the account with $ 2000 that I will retain from the loan from the bank to ensure that there is no breakdown once the restaurant is operating and also to cater for other miscellaneous activities.
Operating Costs
At the start, I will only have myself (owner) as the person who get the wages since the business has not fully developed. I made a plan of withdrawing $1000 every month and approximated the working hours as 6-7 hours a day. There are also approximated taxes worth $ 200 per month. However, as I look forward to enhancing the business, I will have to employ 3 or 4 part-time employees at a cost of the $ 8per hour for a period of 22 hours in a week. There will also be other operating costs that I will settle every month that includes monthly rent $ 350, insurance $ 40, and other utilities that budgeted at $ 150. There is also fixed operating costs approximated to be $ 900. Just like other starting businesses, I may start operating from the negative but I expect to see a steady increase in the sales that will impact on high profits and even increase my salary to $ 4000 a month with a positive increase in cash flow.
Sales Forecast
The restaurant expects to receive a steady flow of customers after few months of operation due to my high level of experience having worked at a SUBWAY fast food restaurant in Beijing and expects to offer even more lucrative services. Using my skills, I will also evaluate the part-time employees to ensure that they give the best services that will attract more customers. The restaurant will have a sales forecast of accounts payable disbursements made after a month. If the sales reach the maximum amount forecasted, then the business will have a net income and positive cash flow that will get employed in improving and growth of the business. The business will also employ flexibility to changes as the food staffs used in the restaurant will depend on the customer’s choice.
Sources of capital
The capital to get invested will come from the initial $11,100 obtained from the bank loan. The loan will get paid back but at a relatively low interest. However, with the expectation of a better service that will yield the positive cash inflow and the net income will act as the capital funding. This is what it means to be self-employed and being one’s own boss. Choosing the business you have an experience on and doing it to your perfection to yield the maximum profit. As suggested by Scott Gerber, “do not start a business just because it seems good or boasts great hypothetical profit margins and returns but do what you love.”
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