DeVry BUSN 278 Week 8 Final Budget Proposal Presentation


DeVry BUSN 278 Week 8 Final Budget Proposal Presentation


Week 8 Project Activity: Final Budget Proposal Presentation


Using a presentation tool such as PowerPoint (with narration), WebEx, Prezi, etc., create a presentation directed to the management team for your start-up business that will outline your proposal, summarize the key points and defend your budget.


Week 7

Final Budget Proposal



Title Page                                                                                                                                          1

1.0 Executive Summary                                                                                                                    3

2.1 Sales Forecast                                                                                                                             3

2.2 Methods and Assumptions                                                                                                         4

4.4   Payback Period                                                                                                                       10

5.2 Pro-Forma Cash Flow Statement                                                                                             12

7.1 Appendix 1:  Pro Forma Income statement Breakdown                                                          17



1.0 Executive Summary

This offer is the beginning and execution of a solitary area, which is sunk into an Italian restaurant named Papa Geo. The café would be located in Orlando, Florida, and would significantly decrease White Collar families and adults as well as the elderly. This restaurant is a true Italian cuisine style, including a mixed green bar, a few kinds of pasta and 3 or 4 varieties of sauces, a soup, a snack and a soft drink bar with self serving. The primary characteristic of the restaurant is Italian and administrative food. In the restaurant, there will also be a play section with introduced gaming equipment. The firm would provide healthy and fresh food at a great cost in a simple organizational system and be situated in a highly populated region that would greatly assist the coffee shop and turn it into an important profitable business.

The budget allocation has been set for five years and takes Year 1 as its main operating year. The owner is needed to pool about 500 kilos of his/her own money and become a 100% partner for this firm. Furthermore, the firm is anticipated to get a 100K advance from the bank to help further fulfill its obligations.

The assessments of the IRR, NPV and Payback project show that there is a good IRR (9%) and a strong NPV suggesting a lucrative project. The short 4.34-year period of repayment also showed that the owner may anticipate his investment recovery in a short period of time. The pro forma financial analysis shows that, as of the second year itself, the restaurant will begin making profits with good gross and net margins. In the following sections, each item in the budget plan is described.

  2.0 Sales Forecast  

– This section forecasts Papa Geo restaurant income over a 5-year period. In Section 2.1 there are modifications to these data which give the anticipated revenue figures and fast rationalization throughout the whole planned timeframe.

– The methodologies used for this estimate of revenue, including calculations and strategies and assumptions are described in Section 2.2. This section presents an estimate of how much food can make from its domestic and external circumstances in terms of income.

2.1 Sales Forecast

The yearly sales forecast for Papa Geo’s restaurant is given below.

Year 1             Year 2            Year 3             Year 4             Year 5


Sales           933,503          1,555,841       1,616,519       1,679,563       1,745,066

Vending Machin

e Sales        5441               5653               5874               6103               6341


Sales           938,946          1,561,494       1,622,393       1,685,666       1,751,407

Section 2 describes my methods and assumptions for the number of income in the desk. According to my calculations 2, the expected income is sold for 12 months. The result is that the calculation’s income assessment cannot be seen to reflect 12 months of sales because the restaurant may not have been in a position to properly recognize and appeal to the expected numbers of customers from day 1. Marketing, company and many other teething challenges will also not lead to flawless income. Therefore, for the first year 60 percent of this parent is the best one, and we will profit from the anticipated difference as the earnings are 12 months 2. In accordance with the company’s usual boom predictions, revenues are projected to grow every 12 months from year 2, at a price of 3.9%.

2.2 Methods and Assumptions

Because around 10 000 households reside 15 minutes from the dining room on Papa Geo’s figures. Of these households, 3% to 5% are rich (Phoenix International Marketing, Wikipedia) and 15% are thought to be high income and upper middle-class houses. That leaves about 80% of the region’s 10,000 households, the target demographic for the eatery. Most American families eat at four times a week. However, given that most families with medium and low earnings are in our target market, I estimate that on average they eat around two times a week. This means that around 16,000 families [(80% *10,000)*2] consume in one semana in the area of Ohio, Florida. In contrast to McDonalds, Taco Bell and the neighborhood works, we believe there are other small enterprises that people may eat. People may also have a dining opportunity beyond their areas. In light of these facts, only about 85% of these familly families (Papa Geo’s, McDonald’s, Taco Bell and Wendy’s) could catch these four places. (16000*85 percent) (13600/week). Since fast food companies often have a larger footprint than other eateries of their kind, we conclude that they share pastries in the family:

Total sales per week: 20400+12240 = $32640

Therefore, average sales per year = 1,729,920 On average, family spend $4.10 on vending machine

Total revenue:


  3.0 Capital Expenditure Budget  

This desk provides an estimate of the asset price range for the food company Papa Geo. Sources and assumptions used are given in the direction of the corresponding feature of the table for each item. Unique assumptions beyond those listed above are given under common assumptions.

  • Operating expenses may be considered and not financed by short-term use of this property (less than 12 months).
  • Various charges for cooking and handling. Cutlery, bowls etc. may be considered to belong under the same class
  • The cost of the refrigerator is approximated and taxes and transport charges may be higher
  • It has a budget of US$43,000. Most of it is utilized to renovate and expense the food.


Highlights and Assumptions:

  • In this instance, best calculations of coins flow are made and thus no consideration is taken of investment flows and coin financing. They are taken into account in the seasoned forma evaluation.
  • Common food costs in materials and labour, along with sales growth, are projected to increase by 4 percent a year. 1360 families are anticipated to dine at the restaurant in accordance with the week on the revenue forecast website. Over a five-year period, equipment costs were decreased on a straight line.
  • Salaries should increase by around 4 percentage points in 12 months • blessing fees have risen by 4% – salary • application fees expected to be normal for the year and throughout the years
  • Subject: sales of 2.5%
  • The following month is 10 percent of income. For the whole year, 10 percent of 12 months’ income is regarded as the handiest food. No longer are system sales stated. In the first year it should be more costly and in the next 4 years it should be less costly.
  • The projected rental is $15 square feet.
  • the contractor is anticipated to purchase 100k mortgage
  • Price of 34% of the tax. Current taxes is fully deductible and may vary

Highlights and Assumptions:

  • The rate of return on cost of capital is 6% and 9%

4.4   Payback Period

Highlights and Assumptions:

Total currency flows after 12 months 4 are 0. For the exact time, we take a share of the cumulative cash flow in 12 months 4, after which the cash flow in year 5 is segregated. The reimbursement term is thus 4.34.

  5.0 Pro-Forma Financial Statements  

The future economic statements of the restaurant Papa Geo are made in this part based on certain expected activities and transactions. They are dynamic planning tools and tend to reflect the performance within destiny of a commercial business based on some basic assumptions.

Assumptions and Highlights:

  • This revenue sheet is included in the contribution form.
  • The affirmation of contribution revenue separates fees into variable and stacked expenses. The contribution statement is best used to develop monetary plans and cannot reflect accounting standards or methods such as IFRS and many others. All data sources are identical to the study of cash flow (section 4.0)
  • Although projected salaries are completely dependent on the specific features of the description of Papa Geo, miles of work are regarded sales-related and the organisation, depending on the amount of business, may also rent or fire.

5.2 Pro-Forma Cash Flow Statement



  • The owner is supposed to have 100 percent stakeholder in the organization that receives $500K of the money. He also anticipated that the owner would no longer pay any dividends but that his revenue would be the best method to demonstrate that.
  • It can be demonstrated that the proprietors of Papa Geo have strong financial reserves since the owner chooses to capitalize on contributions and keep income.


7.1 Appendix 1:  Pro Forma Income statement Breakdown

Total Variable

Costs                           Year 1      Year 2                           Year 3         Year 4      Year 5

Cost of Food

188,68                                                               212,14      230,62

7              196,230                         203,976       4               0


credit card fees            23,574     39,137                           40,562         42,152      43,985


348,64                                                               391,16      407,86

Salaries                        6              362,521                         377,082       8               5

inventory holding

costs                            2,345       3,901                             4,052           4,204        4,479


Total Variable 562,04                                      650,15 676,63 Costs 4 601,653 622,676 8 2


Total Fixed Costs              Year 1      Year 2                           Year 3         Year 4      Year 5

depreciation on                                                                                                      equipment           3,090   3, 090          3,090   3,090   3,090


employee benefits             21,827      21,763                           23,653        24,120      25,205


utilities                               23,000      23,000                           23,000        23,000      23,000

advertising and

marketing                          15,200      10,100                           10,100        10,100      10,100


640,00                                                               640,00      640,00

Rent                                   0               640,000                         640,000      0               0


1,100        1,100                             1,100          1,100        1,100


13,520      13,520                           13,520        13,520      13,520


718,27                                                               716,00      716,99

Total Fixed Costs        6          714,152           707,062           9          4