Restaurant Budget Proposal: Excerpt

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Cameron Webb
5 years ago
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1 Restaurant Budget Proposal: Excerpt Background: Client requested a Budget Proposal for an investor. Investor wanted full capital expenditure outline, 5-year sales forecast, and investment analysis. The scope of work was to develop the financial elements. Proprietary information has been removed. This is an abbreviated and modified excerpt of an actual client business plan. The following is offered for evaluation purposes only to understand quality an offering of Ashley Cheeks, MBA as a Business Plan Consultant.

2 Sales Forecast The restaurant s sales are expected to rise in the first two years based on projections of 10,000 families. Method for estimation can be found in the Marketing section. Full financials are available via Excel sheet titled Full Financials. Assumptions are based on conservative estimates and are based on a phased implementation model as described in the Operational Plan section. Year 1 Year 2 Year 3 Year 4 Year 5 Sales $1,456,000 $1,965,600 $2,457,000 $2,457,000 $2,457,000 NPV Analysis The net present value, or NPV, shows the value of the investment today. The investor will find the $82,081 is actually worth $154,384 within 5 years. Initial Investment $82,081 Period 5 years Discount Rate 5% % of income 25% NPV $154,384 Rate of Return The accounting rate of return shows the impact an investment has upon net cash flows. The below demonstrates the business will produce a healthy rate of return at 342%. The internal rate of return, also known as IRR, calculates the profitability of an investment for the investor. The higher the value, the more desirable the investment. The IRR for the current investor is a desirable 46% rate of return based on moderate sales projections. Entitled Net Net Income Income Year 0 $(82,081) Year 1 $60,981 $15,245 Year 2 $166,867 $41,716 Year 3 $298,141 $74,535 Year 4 $298,141 $74,535 Year 5 $298,141 $74,535 Rate of Return 46% ARR 342%

3 Capital Expenditures In order to open this pizza restaurant successfully, an investor loan will be leveraged to cover approximately $82,000 in capital investment required. Information was gathered from companies who regularly do business with pizza restaurants across the country, interview sources noted in detail in Appendix B. In-Depth Cost Consult provided by: Central Restaurant Products Soda Dispenser Depot Amazon Business Capital Budget Name of Item Qty Ea. Total Cost Middleby Marshall PS520G - Digital Countertop Conveyor Oven, Gas, Double Stack, 60"L 1 $10,999 $10,999 Legacy Planetary Mixer - Standard Kit, 60 Qt. Pizza Unit 1 $16,216 $16,216 Dough hook 1 $287 $287 Proluxe Pizza Dough Press Heated Upper and Lower Plates 1 $3,900 $3,900 Vulcan V36 Commercial 6 Burner Gas Range with Oven 1 $1,650 $1,650 Vulcan LG500 - Gas Fryer, 70 lb. Oil Capacity 1 $1,610 $1,610 True TPP-67 Pizza Prep Table for 9 Pans - Two Door, 67"W 1 $4,404 $4,404 Stainless Work Table With Galvanized Undershelf - 60"Wx24"D 1 $149 $149 Elkay Sales 3C18X X 3 Compartment Sink, (2) 18" Drainboards 1 $1,924 $1,924 Advance Tabco - 7-PS-EC-SP-X Hank Sink With Side Splashes, 14"Wx10"D 1 $159 $159 Heavy Duty Wire Shelving - 60"Wx24"Dx74"H Blue Epoxy 4 Shelf Kit 2 $229 $458 Kold Locker Walk-In Freezer - Indoor, Quick Ship, 8 ft. x 8 ft. With Floor 1 $8,619 $8,619 Walk In Cooler - Remote, Quick Ship 8 ft. x 8 ft., With Floor 1 $8,039 $8,039 True T-23DT Dual Temp Refrigerator/Freezer - Two Half Door, 19 Cu. Ft. 1 $4,924 $4,924 Soda Fountain 1 $1,375 $1,375 Nugget Ice Maker Lbs. Production, Air Cooled with Free Water Filter 1 $3,579 $3,579 True TD-24-7 Deep Well Horizontal Bottle Cooler, Slide Lid, 24"W 1 $1,454 $1,454 Direct Draw Draft Beer Dispenser - 4 Keg Capacity, Club Top 1 $3,555 $3,555 Bun Pan Rack - 3" Slide Spacing, 20 Pan Capacity 1 $90 $90 Edlund 203 Commercial Electric Can Opener Heavy Duty, Dual Speed 1 $679 $679 Complete Table and Base Set - 36"Wx36"D Top, 29"H Base 12 $131 $1,572 G and A Seating 560 Upholstered Back Chair, 18" Seat Height 58 $52 $3,015 Sharp R-21LVF - Commercial Microwave, Medium Duty 1 $370 $370 Adjustable Heat Lamp - Three Bulb, 750 Watts 2 $130 $260 HP ProLiant MicroServer Gen8 1P 4GB-U B120i Non-Hot Plug SATA Server 1 $433 $433 HP Pavilion 22m Touch All-in-One Desktop with Windows 10 Home 64 OS 1 $600 $600 Sonic TZ 200 Firewall 1 $600 $600 Netgear R6300 dual band router 1 $160 $160 Miscellaneous (Napkin holders, silverware, plates) 1 $1,000 $1,000 $77,318 $82,081

4 Cash Flows The net cash flows take into account an average ticket including a family of 4, with each customer paying $7 per ticket. The net cash flow includes consideration for overhead, taxes, and investor returns. Year 2 will see revenues increase by 35% as a result of marketing, and again in year 3 by 25%.

5 Year One Assumptions Average Ticket Sale $28.00 Sales will increase in peak season: 20% COGS: $10.00 Distributor costs will increase in peak season: 5% Tax Rate: 34% Marketing costs will increase in peak season: 5% Investment Amount: $82,081 Direct labor costs will increase in peak season 5% Annual Tickets Sold: 52,000 Cost Contingency: 10% Annual Revenue: $1,456,000 Annual Costs: $883,563 Peak Season Month: Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Annual Total Average Tickets / Month: 4,000 4,000 4,000 4,800 4,800 4,800 4,800 4,800 4,000 4,000 4,000 4,000 52,000 Pi Revenue Business Revenue: $112,000 $112,000 $112,000 $134,400 $134,400 $134,400 $134,400 $134,400 $112,000 $112,000 $112,000 $112,000 $1,456,000 Costs Overhead Costs $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $120,000 Direct Labor Costs $10,000 $10,000 $10,000 $10,500 $10,500 $10,500 $10,500 $10,500 $10,000 $10,000 $10,000 $10,000 $122,500 Materials Costs $40,000 $40,000 $40,000 $48,000 $48,000 $48,000 $48,000 $48,000 $40,000 $40,000 $40,000 $40,000 $520,000 Marketing $1,000 $1,000 $1,000 $1,050 $1,050 $1,050 $1,050 $1,050 $1,000 $1,000 $1,000 $1,000 $12,250 Insurance, Legal $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $6,000 Distributor Costs / Fees $500 $500 $500 $ $ $ $ $ $500 $500 $500 $500 $6,125 Rent and Utilities $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $18,000 Contingency (Misc) $6,200 $6,200 $6,200 $7,058 $7,058 $7,058 $7,058 $7,058 $6,200 $6,200 $6,200 $6,200 $78,688 Total costs $69,700 $69,700 $69,700 $79,133 $79,133 $79,133 $79,133 $79,133 $69,700 $69,700 $69,700 $69,700 $883,563 Income before taxes $42,300 $42,300 $42,300 $55,268 $55,268 $55,268 $55,268 $55,268 $42,300 $42,300 $42,300 $42,300 $572,438 Taxes $38,080 $38,080 $38,080 $45,696 $45,696 $45,696 $45,696 $45,696 $38,080 $38,080 $38,080 $38,080 $495,040 Net income 4,220 4,220 4,220 9,572 9,572 9,572 9,572 9,572 4,220 4,220 4,220 4,220 $77,398 Investment Return: $82,000 over 5 years: $1,368 $1,368 $1,368 $1,368 $1,368 $1,368 $1,368 $1,368 $1,368 $1,368 $1,368 $1,368 $16,416 Net Cash Flow 2,852 2,852 2,852 8,203 8,203 8,203 8,203 8,203 2,852 2,852 2,852 2,852 $60,981

6 Pro Forma Income Statement A realistic view of business income can be achieved by looking forward 3 years into business operations. The income statement showing profit and loss for the new business assumes asset depreciation over 10 years and reveals growing cash flow year over year. Cost of sales should be between 28-32% as a target; to account for unforeseen issues with suppliers, the current materials cost is estimated at 36% of sales for the initial years of operation. Cost of marketing will be kept low with potential to pull from Contingency funds if efforts to leverage low cost, high-impact marketing are not sufficient. Total marketing is projected at 1% of sales and will not exceed 3% of sales, which is recommended for this business type (Ostrander, 2013).

7 Pro Forma Balance Sheets The purpose of a balance sheet is to show issues in cash flow specific to accounts receivable and payable, and displays the net worth of the company. The balance sheet projection for the new business shows healthy asset management and room for using cash to acquire even more asset equipment and facilities. The position of the business projects positive net worth, and with cash flow occurring immediately upon transaction, there are no issues with accounts receivable. To maintain low accounts payable liability at all times, securing vendor agreements at net 30 days will keep the business operating in a healthy cash flow position on the balance sheet. The below is excerpted from accompanying Excel file, Full Financials.

8 Pro Forma Cash Budget The operating budget shows desired figures for operational costs. As each month concludes, the management team will update the actual costs for the month to understand where deviations occur and how to best plan for the following month to avoid any unrealistic budgeting. Contingency funds are calculated in at 10% of all costs, excluding rent, which should be considered contractual and predictable with no need for month over month variation. The 10% contingency shall be used and reallocated where actuals depict shortages month over month. This budget will ensure positive cash balance at all times. --End of Excerpt--

CULINARY ART S EQUIPMENT RFP# 2018-PUR-027

CULINARY ART S EQUIPMENT RFP# 208-PUR-027 PROPOSALS MUST BE RECEIVED BY: 2:30 PM (CST) ON TUESDAY, JUNE 26, 208 Please mark your sealed envelope RFP #208-PUR-027 Proposal and deliver to the following address