MAKING FINANCIAL BUSINESS DECISIONS
MAKING FINANCIAL BUSINESS DECISIONS
Unit 10 focuses on using financial methods and statistical data to provide information on alternative selections within business decisions.
For this Assignment you will create a PowerPoint® presentation based on your “purchase” of a restaurant.
Your presentation is required to have at least one reference from a reliable source. This means that you cannot use sites like Wikipedia, Ask.com®, and Yahoo® answers and that only references from reliable sources will earn points. All resources should be cited both as an in-text citation as well as being listed on a reference slide in APA format.
The building and the land sits on will cost $350,000 and you have 20% to
put down on the property. Annual taxes are $6,000 ad the fire and
liability insurance is $3,600
2)You have $100,000 of additional funds to allocate for refurbishing the
grounds, building structure, Interior design, and kitchen. 10% of the
savings will be allocated to the grounds, 20 % to the building’s structure
20% to update the interior design, and 50% for the kitchen and fire
suppression Systems
Your Restaurant
Your Restaurant
3) Tables are $200 each for 2 tops, $300 each for 4 tops, and $500 each for 6 tops. You plan to purchase eight (8) 2-top tables, six (6) 4-top tables, and ten (10) 6-top tables. Chairs cost $50 each. You are planning on being able to seat 100 people in the restaurant at a time and need 10 extra chairs. Silverware, tablecloths and napkins cost a total of $5,000, serving utensils cost a total of $4,000, and glassware cost a total of $5,000.
4) Place/plate settings cost $30 each. You need to purchase three times the number of planned seats for turn-around and breakage. (Remember you are planning for 100 people in your restaurant.)
Your Restaurant
5) Servicing carts, cooking equipment, prep tables, storage containers, and other supplies will cost a total of $15,000.
6) Research suggests that the average receipt total per person is for example $12.90 and the average cost per meal is for example $6.86 for the Italian restaurants in your area. The research also suggests that tables are turned over for new customers between 13 and 21 times a day in your area, and that restaurants have between 40% and 60% occupancy fill rate each day.
You mission is to create a financial business plan explaining the initial outlay of funds this business venture will cost.
Slide 1
Slide 1: This is your title page. Include your name, project title, the course and section number and the assignment due date.
MM255 Unit 10 Your Name
Your Restaurant Name
Slide 1
Slide 2
Slide 2: This slide is your introduction slide. This slide should summarize your new business venture, describe your restaurant concept (i.e. casual dining, bright atmosphere, etc.) and provide other helpful information. For example, restaurant name, what types of appetizers, salads, soups, entrees, beer and wine availability, and desserts you might serve, and hours of operation. Highlight what makes you restaurant special.
Example Intro Slide Luigi’s Spaghetti House
Your casual Italian dining experience. Come to Luigi’s and enjoy great Italian cooking from Rome born and trained Luigi and Maria Capaso. They came here from Rome 5 years ago to start a business and now they are the head chef’s at Luigi’s. Everything is made the day of your meal and all meals are sure to delight. Hours of operation are Monday thru Saturday 11am to 11pm. Come and enjoy real Italian food and service.
Slide 2
Slide 3
Slide 3: This is your building and real estate summary slide. This slide should include a small picture or building plan drawing of the building, and summarize the purchase price, down payment, and amount financed. The picture of the building can be obtained from a real estate website, or from a building plan drawing available on the Internet (be sure to cite this). This slide should also list the annual tax and insurance amounts. It should also include the monthly mortgage payment including principal, interest, taxes and insurance (PITI). The slide notes (section below the slide in PowerPoint) should contain the steps you took to calculate the monthly mortgage payment.
Building and Real Estate
Purchase Price | $350.000 |
Down Payment % | 20% |
Down Payment | $40,000 |
Loan Amount | $ |
Annual Interest Rate | 3.25%* |
Loan period in years | 30* |
Number of payments per year | 12 |
Principal and Interest | $ |
Taxes | $ |
Insurance | $ |
Total Mortgage Payment | $ |
*These numbers are not given in the assignment
Slide 3 Example
Slides 4-6
Slide 4 to 6: These slides should include your start-up expenses. On these slides you would list the cost of purchasing all of the items listed in items 2, 3, 4, 5 above (tables, place setting, kitchen equipment, etc.). Here you can have fun and include pictures of items, or include graphs of the cost. Be sure to list the total start up expense required to open the restaurant somewhere.
Build out Fund Needs
Additional Funds for Building and Grounds | ||||
$100,000 | ||||
Percent Allocation | Dollars Allocated | |||
Grounds | 10% | $10,000 | ||
Building’s Structure | 20% | $20,000 | ||
Interior Design | 20% | $20,000 | ||
Kitchen Installation | 50% | $50,000 |
Slides 4-6
Slides 4-6 Operating Setup Expenses *Should be on 3 slides
Initial Equipment Purchases | |||
Tables: | Number Required | Cost | Total |
2 Top | |||
4 Top | |||
6 Top | |||
Chairs | |||
Silverware, Tablecloths, and Napkins | |||
Serving Utensils | |||
Glassware | |||
Place/Plate Settings | |||
Serving Carts, Cooking Equipment, Prep Tables, Storage Containers, and Other Supplies | |||
Total Costs |
Slide 7
Slide 7: This is your revenue slide. Create revenues and food costs from your first 6 days of serving food. Present the average receipt total per person, the average cost per meal, number of times a table is sat or turned over, and fill rate or occupancy rate to estimate your
Revenue
6 days (low end) | 6 days (high end) | |
Gross Receipts | $ | $ |
Cost | $ | $ |
Projected Gross Margin | $ | $ |
Slide 7
Average Receipts per person $ , Average Cost per Meal $ , Number of times a table is turned over , Fill Rate or occupancy rate
Slide 8
Slide 8: Conclude your presentation with the “wrap up” of the concept and any final thoughts you might want to include.
Closing Comments What makes Luigi’s different
True Italian food
Chef’s born, raised and trained in Italy
Location of building excellent
Costs planned and reviewed
Revenue generation conservative yet profitable
Slide 8
Slide 9
Slide 9: List any resources you have used for this project. Be sure to include at least one reference from a reliable source. Because many of the concepts here involve reading from the textbook, remember to include a reference for your textbook, as well. Make sure your citations are presented in APA format.
Appendix
Head Count Calculations
Mortgage Calculations
Works Cited
Slide 9
Head count calculations (per day)
40% Occupancy | 60% Occupancy | ||||||
Number of People Seated at a time | # People for 15 times turnover | # People for 23 times turnover | 15 times turnover | 23 times turnover | 15 times turnover | 23 times turnover | |
2 Top (8) | 16 | 240 | 368 | 96 | 147.2 | 144 | 220.8 |
4 Top (8) | 32 | 480 | 736 | 192 | 294.4 | 288 | 441.6 |
6 Top (12) | 72 | 1080 | 1656 | 432 | 662.4 | 648 | 993.6 |
Total Served | 120 | 720 | 1104 | 1080 | 1656 | ||
Revenue $14 | $10,080 | $15,456 | $15,120 | $23,184 | |||
Cost $6 | $4320 | $6624 | $6480 | $9936 |
Mortgage Calculations
= $696.33
Taxes: $9,000 / 12 = $750
Insurance: $2400 / 12 = $200
Works Cited
APA format
Don’t forget an in-text citation from each source.
Review of Unit 10 Work
By Tuesday at Midnight you must complete:
An initial post to one discussion question
Two responses to other student posts to discussion questions
MML assignment
Instructor graded assignment
Seminar 10 quiz if you did not attend a seminar
Recommended Book List
Think and Grow Rich, Napoleon Hill Who Moved my Cheese, Spencer Johnson Rich Dad, Poor Dad, Robert Kiyosaki How to Win Friends and Influence People, Dale Carnegie
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