Financial Projections¶
Assumptions¶
About the cost of the foods:
Content | Estimated Costs |
---|---|
Meal | $8.00 to $15.00 |
Lunch | $8.79 |
Dinner | $13.74 |
Assumptions about the restaurants:
Restaurants | Estimation |
---|---|
Location | Downtown Ghetto |
Size | $5000 square feet |
Tables | 20 |
Seats | 86 |
Parking space | 40 |
Employee | 18 |
$860,000 - $1,200,000 revenue target; Industry average for casual restaurant average of $860,000.
Annual 3% increase for inflation and 5% annual increase in revenues
- Year 2 Assumes Catering Business in Place.
- Assumes 4 parties monthly at $15 per plate and $50 persons.
- Catering will escalate to 8 parties monthly in month 20 and then 10 parties monthly thereafter.
- Assumes additional increase in staffing (4 persons to be hired at 6 hours at $8.00 per hour).
Start-Up Costs¶
Total start up costs will be $363,000, $174,000 of which will be contributed by the owners and the remainder will be secured through a proposed bank loan.
Source and Use of Funds¶
Total start-up costs are estimated to be $363,000. The majority of the costs are associated with the restaurant equipment, inventory and furniture and furnishings for the dining room. Total costs for these items are reported to be $110,500. The costs are associated with build out and renovation of the restaurant to provide updated plumbing and creating additional space in the dining area by removing a non-supporting wall: $50,000. Additional start up expenses are in the form of working capital and contingency $182,500.
Jeff and Betty Wright will contribute $174, 000 and are requesting an additional $189,000 in the form of a bank loan. The loan is expected to be a fully amortizing 5 year term note secured by UCC filings on all furniture fixtures and equipment.
Break-Even Analysis¶
Total fixed costs associated with the restaurant are $669,186 and represent the annual expenses. The variable cost (overhead) is estimated to be $4.51 per meal. Based on the assumption of $11.37 as the average meal price, the breakeven revenue then is $1,108,970 or 97,535 meals (units). This is further depicted in the Table Below and the Graph that follow:
Financial Projections¶
Projected Profit and Loss¶
The profit and loss demonstrates modest increases in revenues over the three expected years with adjustments for inflation.