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.

Startup costs and expense projection

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.

Estimated source and use of funds

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:

Projected break-even analysis